Shoppers Turn to Discount Retailers Aldi, Netto and Lidl

Sales growths in the grocery sector stood at 5.9% in the 12 weeks to 19th April. However, when looking at the latest 4 weeks, Nielsen analysts have confirmed that once the Easter effect is stripped out, the numbers show growths at in grocery retail of just 1% year on year despite food inflation.

Mike Watkins, Senior Manager for Retailer Services at Nielsen comments, "We are seeing a volatile market with consumer confidence, weather and food inflation impacting food sales at the moment. With warmer weather and bank holidays, at best we can expect to see underlying growths settle at around 3-4% as we enter May, some 3% lower than at the start of 2008."

He adds, "Contrary to recent reporting, the Nielsen-BRC shop price index tracked food inflation at 4% YoY in March across a wide range of food and drink. Whilst this inflation is flattering headline growths we are not seeing double digit food inflation except on a limited number of food categories. However the pattern of demand is changing and shopping habits are also a bit different with more people shopping at Discounters like Lidl, Aldi, & Netto this year. Combined sales for these retailers are growing fast at 13% YoY and market share on food now stands at 5.5%." Nielsen can also report more price reductions going through the tills, as opposed to multi -buys, which are being used to stimulate sales by the Grocery Multiple retailers.

"Looking at the last 12 weeks the competition amongst the top 4 remains intense with Total Till growth of between 5.1% and 6.4%. Morrisons again outperform and are still ahead of the market with +9.2% growths and market share is up from 10.4% to 10.7%, but these stellar growths are now beginning to slow. While Tesco have regained some momentum, Asda continue to grow sales faster than both Tesco and Sainsbury."