Shares in online supermarket Ocado (OCDO) gain for the third day running, up 2% to £12.30, after the latest grocery market share data from Kantar shows it continuing to grow sales at a faster clip than even the discounters.

In the 12 weeks to 11 August, Ocado increased its sales by 12.6% through a combination of a 7% increase in customers and a higher spend per basket. Ocado now accounts for 18% of UK online supermarket sales.

BIG FOUR SALES DECLINE

In contrast the ‘Big Four’ of Asda, Morrisons (MRW), Sainsbury’s (SBRY) and Tesco (TSCO) all saw their 12-week sales fall for the second month in a row as overall sales flat-lined compared with the year-ago period.

Even with the benefit of the hottest July day on record, overall volume sales were down almost 1% compared with last year’s ‘barbecue summer’ according to Kantar.

DISCOUNTERS HIT NEW RECORD

Ominously for the big operators, the discount duo of Aldi and Lidl took a combined 14% share of the grocery market over the last 12 weeks, up from just over 13% a year ago and 12% two years ago.

That may not sound like much but it’s already well ahead of Morrisons’ market share (10.1%) and as they continue to open new stores they have Asda (14.9%) and Sainbury’s (15.4%) squarely in their sights.

Aldi, which has 8.1% market share, was strong in fresh bakery goods while Lidl’s campaign to attract people to do their main weekly shop has increased the average basket spend to £19, an increase of almost 20% on a year ago.

Although better known for their discounted own-brand lines, both retailers are growing their sales of branded goods especially alcohol, soft drinks and toiletries.

PROMOTIONS INCREASING

Responses to the discounters vary. Asda, the cheapest of the big chains according to The Grocer magazine, is making a big push online where the discounters aren't able to compete as they have no delivery service. Asda grew its online sales by 11% in the last 12 weeks.

Tesco is focusing on growing sales of its own-label ‘Eastman’ and ‘Stockwell’ brands, with some success, while Sainsbury’s has stepped up its promotional activity on branded goods to shore up sales.

Morrisons, which is already selling more items through deals than any other retailer, has stepped up its level of promotions even further in the last 12 weeks.

However the Kantar data shows sales at Morrisons falling by 2.7% over the last 12 weeks, the worst performance of all the Big Four, as customers put less in their baskets each trip.

Grocery Market Share (12 weeks to mid-Aug)

Store Aug 2017 Aug 2018 Aug 2019
TESCO 27.9% 27.4% 27%
SAINSBURY 15.9% 15.5% 15.4%
ASDA 15.3% 15.2% 14.9%
MORRISON 10.4% 10.4% 10.1%
ALDI + LIDL 12.2% 13.1% 14%

 

Source: Kantar Worldpanel, Shares magazine

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Issue Date: 20 Aug 2019