It’s July and that can only mean one thing – it is time to update the grocery market share data for Great Britain. Forget global warming and the heatwave and the cost-of-living crisis (not really for either), this is the latest instalment of slow data for this series.
Regulars to this blog know that I have been using the Kantar GB market share data each July to build the market share series since 1997. This isn’t about the last 4 weeks or the last quarter, which tend to fascinate so many, but the longer term shifts. I have commented on this data series before, prior to, during, and sort of post pandemic (though it is not really true to say we are post pandemic and even this year with its lack of restrictions is not unaffected by the pandemic), so this is not new, but the annual update always provides some thought.
As always, I recommend going to the Kantar source here and playing with their time line and tools, but also checking out their commentaries as various figures are released.
I tend to focus on two graphs; the first is the market share for the “big 3” and the discounters and the second the concentration ratios for the largest 3 retailers (CR3). The updated graphs are below.
For me, three noteworthy things leap out of this July’s data:
- The decline of 2 of the “big 3”: Whilst Tesco has rebounded in recent years to some extent, Asda and Sainsbury have been having a torrid time with ongoing decline in market share. Asda’s new owners in particular have a job on their hands. As such the CR3 level has continued its fall and at 55.7% is at its lowest level since the series began.
- The rise of the discounters: This is not a new story but has accelerated again. Aldi had a poor pandemic but both Aldi, and especially Lidl, are now firing on all cylinders and have hit record market share levels. Aldi did not quite catch Morrisons but is getting ever closer. For the first time ever Aldi and Lidl combined have a market share larger than both the second and third largest retailers in the “big 3” (16.1% compared with 13.7% and 14.9%). The march of the discounters continues.
- The pandemic is over: No, not in reality but in the case of market shares it certainly looks like. The disruptions of 2020 (and to a lesser extent 2021) have been washed away as patterns return. The Co-op is back to where it was in 2019, as is Waitrose. The big losers in this period are Asda and Morrisons. It is far too easy to say that this is a straight swap from these two to the discounters, as consumer patterns are more complex and volatile than that, but there is a grain of truth in there probably.
And the outlook?
One of the features of the Kantar commentary in recent months has been the switch they are seeing to retailer brands and away from manufacturer brands, as consumers try to combat the cost-of-living crisis. Trading “down” to retailer brands, shifting to discounters (and beyond the two Germans) and reducing spending overall, even on food, will all have an impact on individual retailers especially if inflation remains high.
It will require quite a shift in emphasis from Asda and Morrisons to fight back in this climate. And as market share continues to rise in the discounters and the “big 3 plus” focus on retailer brands, so manufacturers will be considering where they are best placed to capture or maintain consumer spend. It is going to be a volatile year.