Low-cost and online grocers were the fastest growing food sellers in the U.K. over the three months ending on Sept. 10, according to industry data, as pressure on traditional retailers continued.
Ocado (OCDDY) , the U.K.'s online-only grocer, saw sales in the time period grow 10.1%, according to data from Kantar Worldpanel released Tuesday, with 834,000 households shopping at the retailer in the 12 gives, giving its highest-ever penetration of population.
Low-cost retailer Lidl saw the fastest sales growth, with sales up 19.2% in the period. The privately held German grocer's market share increased to 5.3% from 4.6% last year. Fellow privately held German retailer Aldi, saw sales surge 15.6% and market share bump up to 6.9% from 6.2%.
There is no doubt why consumers are being driven lower priced retailers, Kantar Worldpanel found that food inflation hit 3.2%, slightly ahead the CPI which came in at 2.9% in August, according to the Office for National Statistics.
Walmart's (WMT) - Get Walmart Inc. Report U.K. unit, Asda, fared well during the period with sales up 1.5%. Asda has attracted an additional 482,000 shoppers compared with a year ago - the fastest new shopper acquisition by the retailer in over three years.
"Average spend at Asda is £25.74 - the highest of any grocer - which reflects the success of its larger stores and their appeal for families," Kantar Worldpanel head of retail and consumer insight Fraser McKevitt said in a statement.
Supermarket have been under pressure since Amazon (AMZN) - Get Amazon.com, Inc. Report completed its $13.7 billion acquisition of Whole Foods Market (WFM) and subsequently lowered prices by as much at 43% on some products and scaled up its online offering.
Ocado shares dropped more than 7% in the first hour of trading, extending a three month decline of 8.36% after it said Tuesday that costs in the short term would increase as it scales up its fulfilment facilities.
In a trading statement Ocado said that revenue across its retail operations were up 13.1% in the 13 weeks to Aug. 27, with average orders per week up by 16%.
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