UK first as the Kantar Worldpanel reports a record drop in prices

The rise of discount supermarkets has helped cause a UK first – the amount of money spent on groceries has dropped.
This is the first time this has happened since the Kantar World Panel began collecting data in 1994.
It shows how significant the current shift in the supermarket economy and the ongoing price war is. Market shares are shifting from the big four who dominate the market, namely Asda, Tesco, Sainsburys and Morrisons, to the discounters; Aldi and Lidl.
Compared to last year, the 12 weeks leading to 09 November saw a drop in overall sales of 0.2%, dropping to £24.92billion. All of the big four, plus The Co-operative recorded a drop in their sales.
However, Aldi saw a year on year rise in sales of 25.5% while Lidl’s went up by 16.8%. Waitrose also saw a rise of 5.6%.
Fraser McKevitt, the head of retail and consumer insight at the Kantar Worldpanel said, “The declining grocery market will be of concern to retailers as they gear up for the key Christmas trading season. The fight for a bigger share of sales has ignited a price war which means an average basket of everyday goods such as milk, bread and vegetables now costs 0.4% less than it did this time last year. This is bad news for retailers, but good news for shoppers with price deflation forecast to continue well into 2015.”
Goldman Sachs recently speculated that up to 20% of current UK supermarket space was unnecessary, as people are vetoing the idea of going to the huge megastores for a weekly shop, and are instead turning to the discounters and online shopping.
The fact that the amount of money spent has dropped is good for customers, especially in the run up to Christmas, as it means we are paying less than usual at the busiest time of the year. It is however, bad news for the big stores who continue to struggle.