Discount supermarket growth slows

Link to the article at Channel 4 News

Source PA News

Discount supermarkets are giving back the strong gains made last year when hard-pressed shoppers hunted for savings, according to new figures.

Mainstream rivals have fought back against stores such as Aldi and Lidl as food price inflation also eased, according to TNS Worldpanel.

Aldi's till takings were 8% ahead of a year earlier in the 12 weeks to September 6 - but this is well below the 26% year-on-year growth seen late last year. Rival Lidl saw 5.2% growth in line with the market.

TNS Worldpanel director Ed Garner said the figures "increasingly confirm the impression that 'recession panic' is ebbing away as far as the grocery market is concerned".

"Food remains a manageable proportion of most household budgets by historical standards and, it could be argued, the grocery sector suffered from an over-reaction at the end of 2008," Mr Garner said.

The figures came as official data showed annual food price inflation at 1.9% - its lowest level in more than three years - after a better than expected European harvest helped bring wheat prices down.

Waitrose enjoyed its strongest growth since August 2006, with till takings 11.2% ahead of last year and its market share up from 3.7%, although the group received some help from its acquisition of 13 Somerfield stores.

Meanwhile, market leader Tesco continued to lose ground to its UK rivals, with its share slipping from 31.1% to 30.9% and growth at 4.6% - below the level of the wider market.

Morrisons was the strongest performer among Tesco's main rivals. The firm's share jumped from 10.8% to 11.3% after 9.3% growth over a year earlier.