Discount retailers win supermarket battle

The festive season highlighted the increasing polarisation of the grocery market in which discount and high-end retailers gain at the expense of large, middle-market players.

Data from Kantar Worldpanel shows that German-based discount retailer Aldi's turnover surged more than 30 per cent during the 12 weeks leading up to Christmas compared with the same period in 2011, while discounter Lidl rose almost 11 per cent and frozen food specialist Iceland nearly ten.

At the other end of the market, Waitrose had an increase in sales of 5.4 per cent, while Sainsbury's was up 3.4 per cent, making it the only one of the big four supermarkets to increase market share.

Market leader Tesco slipped 0.1 per cent in market share despite a passable 2.9 per cent increase in turnover.

The big loser was Morrisons. Its turnover dropped 0.6 per cent while its market share slipped by 0.4 per cent.

Sainsbury's reported strong growth in its own-brand lines, which grew three times faster than branded products during the last quarter of 2012.

Its convenience stores showed growth of more than 17 per cent, while its online business grew more than 15 per cent - both sales channels in which Morrisons is largely absent.

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