The economy may be improving, but a continuing price war is keeping growth in the grocery channel in check. The latest grocery share figures from Kantar Worldpanel, for the 12 weeks ending 11th October 2015, show overall supermarket sales growth up by only 0.8% compared to a year ago. Despite a more buoyant overall economy, supermarket revenue growth has not reached above 1% since March 2015.
To compound this, the latest SRC KPMG Scottish Retail Sales Monitor reports that Total Food sales were 3.6% down on September 2014, when they had decreased 2.4%.
David McCorquodale, Head of Retail at KPMG, said: “Food sales continued to decline in real terms as they have for the last 22 months, excluding Easter distortions, and much has already been said about the challenges in the grocery sector.”
Fraser McKevitt, Head of Retail and Consumer Insight at Kantar Worldpanel, said: “With like-for-like grocery prices 1.7% lower than last year, the supermarket price war shows no signs of abating. Consumers have now enjoyed more than 12 months of continually falling prices and are currently pocketing these benefits rather than splashing out on substantially more grocery items, with overall volume growth of only 2%. This equates to £1.5bn taken out of the market in the last year, saving each household £58 on average.”
In contrast to the overall market, online grocery sales have increased by 9.8% on last year. Despite this rapid expansion, space for retailers to increase both share and revenue in this area remains, with less than a fifth of households currently shopping online.
