Inflation overtakes grocery market growth, reports Kantar

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Grocery price inflation has hit 4% and overtaken market growth for the first time since mid-2009, according to the latest share figures from Kantar Worldpanel for the 12 weeks ending 20 March 2011.

Growth at grocery retailers has fallen from 3.9% last month to 2.6% suggesting shoppers are taking an increasingly gloomy view of 2011 and reining in their spending, said Kantar.

However, the discount retailers, Aldi and Lidl, continue to enjoy double digit growth with Aldi increasing its share from 2.8% a year ago to 3.1%. Lidl grew its share from 2.3% to 2.5% in the same period – an all-time record for the retailer.

Edward Garner, communications director at Kantar Worldpanel, said: “Both performances are being driven by existing shoppers spending more, rather than by new shoppers visiting the stores.

“Similarly, the freezer centres, Iceland and Farm Foods, outperformed the market, posting sales increases of 4.2% and 11.7% respectively. This growth is driven by customers seeking out value-for-money products – something they know they can get from these stores.”

Garner said there were no signs yet of the explosive growth in economy own-label ranges witnessed in 2008 but clear indications value-for-money is driving retailer performance.

However, while some shoppers ought value for money this month, not all shoppers shared the same view.

Waitrose, for instance, continued to perform well, posting a higher market share of 4.3% compared to 4.1% a year ago.

For the top four retailers, the tussle for share continued unabated with only Morrisons marginally increasing its share to 12.2%, compared to 12.1% for the same period last year.