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Gloucestershire Business News

Cut price supermarket chains continue to eat into UK grocery market

Discount stores Lidl and Aldi have grown to take a record 11.7 per cent share of the UK grocery market collectively.

Supermarket sales in the 12 weeks to March 26 increased in value by 1.4 per cent compared to last year, according to a report by Kantar Worldpanel, the global experts in shoppers' behaviour.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: "Despite rising prices, we've seen shoppers' minds turn to healthy eating after the excess of the festive period and before the temptation of Easter.

"Greater demand for gluten or dairy-free products, particularly from younger shoppers, has boosted the 'free from' category by 36 per cent year on year. In fact, 54 per cent of the population purchased a 'free from' product during the past three months - that's 3.3 million more people than last year.

"Meanwhile inflation shows no signs of abating. The price of everyday goods is up by 2.3 per cent compared to this time last year, and rising prices cost the average household an additional £21.31 during the past 12 weeks.

"We expect inflation to continue to accelerate, and as a result we're likely to see consumers looking for cheaper alternatives."

Sales growth of 15 per cent made Lidl the fastest growing retailer, increasing its share of the market by 0.5 per cent to 4.9 per cent. Meanwhile, Aldi grew sales by 14.3 per cent taking its share to 6.8 per cent. An ongoing programme of store openings by both retailers meant that the two together attracted an additional 1.1 million shoppers over the past three months.

Iceland posted its strongest sales growth since March 2013 - up 9.8 per cent year on year - thanks in large part to the supermarket's fresh and chilled lines. These products now account for more than a quarter of sales at the retailer, as Iceland moves beyond its traditional focus on just frozen foods.

Tesco's market share fell by 0.5 per cent to 27.6 per cent. At Asda sales fell by 1.8 per cent while Sainsbury's declined by 0.7 per cent.

Co-op enjoyed its 23rd consecutive period of growth, increasing sales by 0.8 per cent year on year.

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