Morrisons continues to outstrip market growth

While Christmas is now a distant memory for most retailers, the competition for shopper spend remains intense. Nielsen reports that 12 weekly growth in the grocery retail sector (for the 12 weeks 26th January) stood at + 6.4% year on year with the most recent 4 weeks being slightly ahead of this at + 6.7%. Though an improvement on recent months, these figures remain behind market performances a year ago when food retailers were seeing year on year growths above 7%.

The winner continues to be Morrisons who once more have turned out market leading sales performances. Mike Watkins, Senior Manager retailer services at Nielsen comments, "Morrisons have continued with their innovative media campaign and have sustained their strong Christmas performance through to the end of January with headline sales growths of 12%." He continues, "Morrisons' strengthened positioning and targeting plays well in the current economic climate. Around 950,000 more households shopped at Morrisons this January, compared to January 2007 and if Morrisons manage to keep hold of the spend of their new shoppers', the pressure on Tesco, ASDA & Sainsbury's will be sustained."

Nielsen's Total Till monitor reports that 12 weekly growths at Tesco and Asda are currently between 5% and 6% with Sainsbury enjoying greater momentum with growths of 6.5% versus the same period last year. Waitrose are also holding growths at +6%. Whilst Co-op and Somerfield see lower growths than the top 4, the Co-op has successfully attracted new shoppers in January. 25% of all GB households visited the Co-op in the last month compared to 23.6 % a year ago which is over 400,000 new shoppers visiting the Co-operative retailers. The figures in the table are based on 12 weeks sales through to 26th January 2008 compared with the same 12 week period last year. Source: Nielsen Total Till, Nielsen Homescan

The dramatic turnaround in the Morrisons' sales performance since the Autumn has impacted both Asda and Tesco and the relative slow down in Tesco`s sales growths are reflected in a slight loss of Total Till share, currently 29.1% compared to 29.3% last year (12 weeks to 26/1/08 versus the same period in 2007 ). However in the last 4 weeks, Tesco have pulled back the shoppers who temporarily left them over Christmas and current sales growths are strong and on a par with Asda.

Most of the deep promotions at the top 7 grocery retailers have ended (Morrisons being the exception) which has returned value to the market, and in particular for the Grocery and Liquor categories. However, promotional activity is still higher than year ago and the consumer remains cautious even if food spend in recent weeks has been better than expected for many retailers. Watkins concluded, "A good but not exceptional Christmas has been followed by a better than expected January . With Easter coming early this year and a number of key event opportunities between now and the end of March, we can expect the high levels of promotional activity to continue until Spring."