After the developments during 2016, the January Kantar figures must have been the most anticipated for years. These are the figures that give the cleanest view of who has “won” Christmas.
Let’s start with the news that hit us before Kantar today with an incredibly buoyant trading statement from Morrisons. Growth (excl. Petrol) of +2.9% is a strong indicator that David Potts’s team is starting to get to grips with the business. Some Leahy-era Tesco thinking has become evident with a simplified approach and a focus on the basics. There’s still room for improvement across the estate, as well as some sporadic availability issues to address, but nothing that is insurmountable.
The Kantar figures have sparked some debate about who has “won” Christmas.
Aldi and Lidl had a combined share of 10.4%, down 0.4%pts from the December data, but still up on last year’s figure of 9.7%. Even in a period of change in the grocery sector, some things remain constant and it looks like the “trade-up” shop is one of them. Traditionally, Sainsburys would benefit from this and have done so this year, albeit to a lesser extent which has seen them lose share year-on-year.
There does seem to be less dramatic changes in share between December and January this year however. Waitrose increased by 0.2%pts (0.1%pts last year), while the Co-op stepped back 0.3%pts to remain flat year-on-year at 6.0%.
Combined, the Big 4 stepped on 0.4%pts to 71.3% of shares – this was down from 72.5% last year, but the step-on was also lower.
Asda’s performance continues to worry although they may take some comfort from an increase in their market share compared to December. Whether this is really the start of a revival or not won’t become clear until the March data when Christmas impacts will have been lost. Without seeing too much different in store, apart from some good work on their Extra Special premium brand, it may be that Asda has become a Christmas trade-up destination for Aldi or Lidl shoppers searching for a wider range of food, as well as better quality non-food gifts.
While Asda are still one of the Big 4, they need to maintain their share of the declining portion of the grocery market that the Big 4 hold. This simply didn’t happen over Christmas – as the chart below shows, Tesco and Morrisons have grown their share of Big 4 sales with Sainsbury’s remaining flat and Asda losing out.
I have spoken for some time about the need of the Big 4 to get growth from each other rather than trying to take on the Discounters at their own game. This is harder for Asda than the others as their only lever has traditionally been price. Visiting several Tesco stores in December, it felt like a pre-Discounter era Christmas in store in terms of products and displays. In a way, the stores that performed the best were the ones that felt like Christmas throughout the whole store.
With the challenges ahead in 2017, it will be hard to predict what will work for Christmas. That’s going to make the buying teams’ jobs harder than ever so we may see this year’s lessons put into practice. Price will surely play a bigger role next year, but hopefully we’ll see more of the traditional trading ideas come back into the sector.
After all, it’s a tough time of year to work in retail, so let’s try and have some fun while getting the tills ringing!
Thanks to Kantar Worldpanel for their data.