Tesco and Morrisons hit as UK grocery market falls

29th Jul 2014 09:32

The British grocery market hit its lowest growth rate for a decade as discounters took another bite out of Tesco and Morrisons' business.Grocery price inflation fell to a historic low of 0.4% and the grocery market expanded by just 0.9% - the lowest figure for 10 years - in the 12 weeks to July 20, according to data from market researchers Kantar Worldpanel.Competitive pricing among the big grocers and deflation in the year-on-year price of more than 75,000 staple items such as vegetables, milk and bread has driven inflation to the lowest level since October 2006, spelling good news for cash-strapped consumers.German discount chain Aldi expanded by 32% in the period, lifting its market share to a record 4.8% and nearly in line with upmarket rival Waitrose on 4.9%. Waitrose increased sales by 3.4%, lifting its market share.Similarly, sales at rival price-cutter Lidl rose nearly a fifth and it held onto its record share of 3.6%.Walmart's Asda and Sainsbury's held their market shares of 17% and 16.6% respectively.But Tesco and Morrisons recorded losses with sales for both outlets declining 3.8% against this time last year.Frozen food chain Iceland posted a small drop in sales, its first since 2005, but kept its 2% share.PW