Middle class shoppers flock back to Ocado
. . . but Asda reels as sales slip
OCADO was yesterday named the UK’s fastest growing supermarket for a second month in a row – while Asda is the only major player to see sales fall.
In a closely watched update on the state of the grocery market, industry research group Kantar said Ocado sales were 12.5pc higher in the 12 weeks to April 14 than in the same period a year earlier.
That eclipsed strong performances at Lidl, Sainsbury’s and Tesco in a sign that middle class shoppers are returning to Ocado after opting for cheaper rivals as living costs soared.
The business’s shares rose 5.4p but remain down nearly 90pc since peaking during the Covid19 pandemic when shoppers flocked online to buy groceries.
Marks & Spencer is also believed to be growing strongly as its recovery continues, but the High Street retailer is not included in the monthly Kantar report.
The update made bleak reading for Asda, however, with sales over the 12-week period some 0.4pc lower than a year earlier.
That made it the worst performing of all the major supermarkets and underlined just how far it has fallen since its takeover by the Issa brothers and their private equity backers three years ago.
In a boost for shoppers, the report showed grocery prices are just 3.2pc higher than a year ago. grocery price inflation has fallen for 14 months in row, down from a peak of 17pc, and stands at its lowest level since November 2021.
With cost pressures easing, supermarkets have embarked on a fierce price war to lure shoppers, with Ocado and its joint venture with M&S benefiting along with Tesco and Sainsbury’s.
Kantar said £638m was spent at Ocado over the 12-week period, giving it a 1.9pc slice of the market, up from 1.7pc a year ago.
It is another sign that the tie-up between M&S and Ocado – which allows Ocado customers to buy M&S groceries online – is finally paying off.
Welcoming the figures, Ocado retail boss Hannah gibson said: ‘It’s great to see that our focus on unbeatable choice, unrivalled service, and reassuringly good value is resonating with shoppers.’
retail expert Nick Bubb said: ‘Online grocery does seem to be making a comeback, because food price inflation has fallen right back and so shoppers are under less pressure to go to supermarkets to find bargains.
The revival of Ocado is best seen in that light – but the greater influence of M&S on the product range must be helping to attract more customers as well.’
It was another strong period for Tesco, Britain’s largest supermarket, which raked in sales of £9.3bn over the 12 weeks. That lifted its market share to 27.4pc from 27pc a year ago in a boost to chief executive Ken Murphy as he faces questions over his £10m pay packet. Sainsbury’s also saw its slice of the market rise from 14.9pc to 15.3pc as £5.2bn passed through its tills.
Lidl was the only other supermarket to see its market share rise – from to 8pc from 7.6pc a year ago – while Aldi’s dipped from 10.1pc to 10pc.
Morrisons and Waitrose held firm at 8.7pc and 4.5pc respectively but Asda’s market share dropped from 14pc to 13.4pc.
On some measures, Asda has already lost its place as the country’s third biggest supermarket to Aldi. Sales also fell at the Coop, the report showed.
‘Less pressure to find bargains’