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Sancho Panza

Uk Grocery Sales Fall For 1St Time In 20 Years

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Reuters 18/11/14

'(Reuters) - A price war, led by German-based discounters, has pushed Britain's grocery market into its first sales decline in 20 years, industry data showed on Tuesday.

"The fight for a bigger share of salesicon1.png has ignited a price war, which means an average basket of everyday goods such as milk, bread and vegetables now costs 0.4 percent less than it did this time last year," Fraser McKevit, head of retail and consumer insight at Kantar Worldpanel, said in a statement.

Market researcher Kantar Worldpanel said British grocery sales fell 0.2 percent in the 12 weeks to Nov. 9 compared with the same period last year, the first decline since its records began in 1994.

"This is bad news for retailers but good news for shoppers, with price deflation forecast to continue well into 2015," McKevit said.

Price deflation reflects the impact of discounters Aldi [ALDIEI.UL] and Lidl [LIDUK.UL] and the market's competitive response.

Kantar said sales at market leadericon1.png Tesco (TSCO.L), which is currently mired in an accounting scandal, fell 3.7 percent over the 12-week period, though the rate at which it has been losing market share has slowed.

Asda, the British arm of Wal-Mart (WMT.N), recorded the best performance among the so called "big four". Its sales fell in line with the overall market, and its market share was steady at 17.2 percent.

Sainsbury’s (SBRY.L) and Morrisons (MRW.L) both recorded a decline in share compared with last year, with sales down 2.5 percent and 3.3 percent, respectively.

Aldi's sales rose 25.5 percent, giving it a record market share of 4.9 percent. Lidl's sales increased 16.8 percent, giving a market share of 3.5 percent.

At the premium end, Waitrose's [JLP.UL] sales rose 5.6 percent, taking its share to 5.1 percent.'

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'(Reuters) - A price war, led by German-based discounters, has pushed Britain's grocery market into its first sales decline in 20 years, industry data showed on Tuesday.

Is it really what they call "a price war" as usually understood within the UK.

It's always seemed that (say) Aldi and Lidl are offering reasonable products at reasonable prices year after year rather than ripping off consumers year after year like the UK retailers.

The recent difference is that UK consumers are only recently starting in numbers to recognise the difference in value.

Aldi and Lidl etc only need to start opening attached cafe/restaurants and they'll be well on their way to having the market stitched up.

Edited by billybong

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Is there also a possibility that people are buying/throwing out less?

Yes.....love food hate waste......time for suppliers and supermarkets to save on waste......and yes people do buy and enjoy ugly and dirty fruit and veg. ;)

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Anyone on the 5-2 diet is usually consuming about 40% less, and also avoiding the more expensive items like booze. Do you know anyone who isn't on it, or has done it for a while recently?

Interesting point about Aldi/Lidl raising their game, they only have to get slightly better at what they do over the next few years, but where can Morrisons, Sainsburys, Asda go?

Lots of people are also into nutribullet or some form of juicing mega cheap in the long run, from personal experience you go off alcohol, s*** food and frankly anything processed massive hit for the Big 4

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Weirdly our annual rolling bill has taken a slight drift upwards....damn those thrifty shoppers. Suddenly the Warburton's premium loaves at a fifth price (29p) are no longer available for the freezer because they are getting snaffled at just under half price by cost conscious shoppers. Paying 58p for seed sensation or granary is something I will have to get used to I suppose. Meanwhile Tesco have got less generous with their five pound vouchers when you spend twenty...i guess they can no longer afford it. Just about always got a fiver off before we even started our shop.

So the shopping bill has gone from diddly squat to diddly squat and a bit. Food still cheap.

Edited by crashmonitor

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I think they have this story the wrong way around. It is not the German discounters 'pressuring the supermarkets into discounting'. The German supermarkets have been here for some time.

That's about it. Things are relatively cheap . . . until they aren't. Marketing tells us that all products have a price barrier somewhere.

When Aldi started in UK, (1989), I doubt if people ever thought about the price of a cauliflower or a bunch of carrots. Now, even in Asda, you just know they're havin' a laugh.

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I think they have this story the wrong way around. It is not the German discounters 'pressuring the supermarkets into discounting'. The German supermarkets have been here for some time. What has changed starts at the consumer end. They (Aldi, Lidl et al) are almost as passive as the other players in the market in these grand moves, although their own success is now tempting them to ramp up.

All markets are now polarising much more strongly and quickly than in the past toward 'luxury' and 'cheap' as inequality has exploded following central bank and government action in the wake of the financial crisis.

This big move has then caused people to seach for value which has ended up in places like Aldi, Lidl, Primark, Poundland....successful focused businesses one and all.

Those businesses that get confused about where they stand and try and maintain margins in the middle England segment where they've all sat quite nicely heretofore are going to have to shrink.

What he said.

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On the subject of Aldi and Lidl, I'm yet to be convinced by the quality of their meat produce.

I can never find minced beef with less than 20% fat, whereas Tesco and Morrisons do 5%. The chicken breasts tend to have small bones in them, and while I suppose its not "the discounters" job to provide "fancy meats" I still find myself going to the larger supermarkets for things like lamb shoulders and gammon.

Lidl steaks tend to be very good though.

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I've used Aldi and Lidl for years so felt a bit miffed at their quick rise. Almost like everybody else had discovered my favourite Indy band. Recently though, Lidl have set aside a lot of their freezer space for their 'connossieur' i.e. pricey, range of foods. A mistake IMHO.

Both Lidl and Aldi have large non-food ranges like wellies, doormats, power tools and so on which dominate the retail space in the shops near me. Now ful of cheap European booze for Christmas that will go well.

As above, some meat products are lacking. The Aldi frozen chicken breasts are truly shocking. Lidl often had discounts on their fresh meat at weekends which I indulge in.

Edited by deflation

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The couple of pound i may save at Aldi is offset by the 20 minutes i have to queue as theyve only 2-3 tills open.

I still think that if you buy Tesco own brand stuff (not the real cheap crap) then theyre similar priced to Lidl/Aldi.

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