Retailers boosted by rising food prices

Grocery market figures from Kantar Worldpanel, published today for the 12 weeks ending 8 August 2010, show healthy growth in the grocery sector, boosted by food price inflation, which crept up in August for the third month running.

Despite the grocery sector growing by 4.5% this period, the fortunes of the top four supermarkets continue to be mixed. While Sainsbury’s and Morrisons have both increased their market share by 0.2 points, Tesco and Asda have underperformed the market this month and seen a dip in their share by 0.2 and 0.3 points respectively.

Edward Garner, communications director at Kantar Worldpanel, said: “Morrisons in particular has shown a strong performance this month. Despite some commentators expecting Morrisons’ growth to run out of steam it still comfortably leads the top four in terms of year-on-year performance with growth of 6.9%.”

At the other end of the retail spectrum, there are signs of life in the independent sector following a revival during the FIFA World Cup. After coming under pressure from the multiples for a long time, the independent sector has enjoyed an impressive 8.4% year-on-year growth this period. Kantar credits the gains to the enterprise of individual operators who are providing excellent local service in a competitive market.

Despite Aldi experiencing a boost in the last couple of months, the discounters as a whole are still struggling to increase their share of consumers’ wallets, with their total market share not budging above 6% for the last two years, reports Kantar. Elsewhere, the Co-operative’s assimilation of Somerfield has accelerated over the summer and its market share has leapt from 5.5% to 6.4% this period as Somerfield gradually disappears.