This week’s Supermarket Sweep of News sees a growth in mums’ worries, and big increases in sales by the discounters.
Added to this is research about an increase in the supermarket own label market.
Taken together, some people are undoubtedly abandoning the established supermarkets in favour of Aldi and Lidl. However, the greater trend is of people splitting their shops between stores and shifting more purchases to own label products.
Mums worried about the future as much as the present
ASDA released its latest findings from Mumdex this week, the supermarket’s study of mums’ attitudes and behaviour.
Top line is that its optimism index has dropped significantly, from -8% to -16% since February this year.
Digging deeper, the research also shows that mums are balancing two sets of concerns – day to day pressures, and the future of their children.
Future job prospects for their children are high on their list. Over one third fear there will be a great deal fewer opportunities for their children, compared with their generation.
Mums are also concerned with squeeze on disposable income. This is matched with a desire to spend more quality time with family. Forty percent report finding more enjoyment in spending quality time with the family than on expensive gifts and events.
Disposable income falls, discounter sales rise
Mums’ worries are well founded. Also according to ASDA’s research is that the typical UK household had a 4.2% reduction in its weekly wage packet during April this year, compared with April 2011r. The average UK family had £144 a week of disposable income in April, the lowest level since November 2008.
Not only do labour market conditions continue to constrain income growth, the cost of food over the year has risen by 4.3%, and petrol prices have increased 4.9% month on month. This is despite the ongoing discounting and promotions across some of the major supermarkets.
It is therefore not surprising that according to the latest rankings from Kantar Worldpanel Aldi sales grew by more than a quarter in the three months to 13 May over the same period in 2011, to reach an all-time high 2.8% of the market. Lidl also grew ahead of the market, with sales growing by 11%.
Own label market continues to grow
For the first time, new own label products surpass big brand labels on supermarkets shelves, according to Mintel .
In 2011, 54% of new products were own label. In addition, the market for own label food and drink reached £37bn in 2011, a 24% increase since 2006. At the same time, shoppers report finding that own label products are now better than they used to be. 57% of shoppers think this, while 52% prefer them to traditional brands.
More than 80% of shoppers believe that own label products provide value for money. This compares with just 16% for brands. Furthermore, 80% of shoppers report buying own label products.
People spending more in the run up to Jubilee weekend
At the same time that sales at the discounters have grown, so have sales at the more upmarket Waitrose.
According to Kantar Worldpanel, Waitrose sales grew by 7% in the three months to 13 May over the same period in 2011. This is against a backdrop of increased sales by Waitrose owner, John Lewis, which saw an increase in sales of 16.6% year on year, to £62.2m in the week to May 12.
John Lewis sales were driven by sales in the electricals and home technology category, which jumped by a massive 39%, helped by iPad sales.
M&S cuts sales forecast
As a further indicator of an economy in poor shape, Marks and Spencer has scaled back its ambitious growth targets.
M&S CEO Marc Bolland, set a goal in November 2010 to increase sales by between £1.5bn and £2.5bn over three years. It is now targeting sales expansion of between £1.1bn and £1.7bn over those three years, which would take 2013-14 annual sales to between £11.1bn to £11.7bn.
This is against a backdrop of poorer than anticipated financial results. Pre-tax profits for the 2011-12 financial year to March 31 was £658m, down 16% on the £781m posted last year.