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Price war drives down growth and sales

Supermarket growth continues to be slow, according to the latest Kantar Worldpanel results. For the 12 weeks ending 24th May 2015, Kantar reported slow growth in the sector with sales increasing by just 0.2% compared to a year ago.  Morrisons was the only one of the big four retailers to see increased sales in the latest period, although its market share remained unchanged at 10.9%.

May was not a good month on the KPMG Scottish Retail Sales Monitor either, with total food sales decreasing 2.1%, which the Scottish Retail Consortium attributed to the increasingly competitive landscape in the grocery sector. The 2.1% decline was in line with the 12-month average of -2.1%, after underperforming it for much of the past year, while also being relatively in line with its 3-month average of -1.8%.

However David Lonsdale, Director of the SRC commented: “Sales of grocery items have stabilised, in line with their 12-month average for this category, suggesting a further gradual improvement in food which until recently had reported ever deepening contractions month after month.”

Fraser McKevitt, Head of Retail and Consumer Insight at Kantar Worldpanel said: “All of the major supermarkets are finding growth difficult as prices have been declining since September 2014.  Yet while like-for-like groceries are 1.9% cheaper than this time last year this is not as steep a fall as last month, when prices were down by 2.1%.  This means that if current trends continue, prices will once again start rising by the end of the year.”

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