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Consumers are winners in supermarket price war


The supermarket price war has lead to deflation in the grocery market, and like for like prices have declined by 0.2%. Extensive price cutting now means consumers are saving more and more money on everyday items like vegetables and milk, according to research firm Kantar Worldpanel. Shopper are now paying less for a representative basket of groceries than they would have done in 2013.

The face of supermarkets seems to be changing dramatically, with Tesco’s sales falling by 3.6% in the 12 weeks leading to October. Tesco’s market share is now at 28.8%, down from 30.1% a year ago. Sainsbury's sales have fallen by 3.1% and Morrisons by 1.8%.

Aldi’s growth slowed slightly compared to recent months, but sales were still up 27% versus last year resulting in a market share of 4.8%. Lidl’s sales grew by 18%, with its market share standing at 3.5%. Upmarket grocer Waitrose’s sales rose by 6.8% over the past year, and now holds 5.2% of the market share.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel said:
“While the supermarkets are battling it out on price, the real winners are consumers.
“We are seeing clear polarisation of the market with both the premium and discount ends of the market gaining share, while the mainstream grocers continue to be squeezed in the middle”

Tesco is due to report its half-year profits on Thursday, as well as an update on its inquiry into its recent accounting scandal, which saw it overstate its expected profit by £250m.

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