Shoppers flood back to Waitrose

Hopes of an improvement in the economy were given a further boost by Waitrose's sales figures in the quarter to August 9th. According to TNS Worldpanel they grew 10.2 per cent in the 12 week period, almost double the average sector increase of 5.6 per cent, and helped the upmarket grocer regain ground on discount rivals like Aldi, which saw 8.1 per cent growth during the three months.

Part of the improvement was attributed to the introduction of Waitrose's new Essentials range, which offers shoppers a cheap basic selection of goods, already available widely throughout the industry. The range of 1,400 products now accounts for 21 per cent of total sales at the group.

TNS Worldpanel director Ed Garner said, "Taking the contrasting performances of Waitrose and the discounters together implies that 'recession panic' is abating as far as the grocery sector is concerned. Our data shows that the new shoppers attracted to these outlets and their low prices have largely failed to convert to regular loyal customers."

Waitrose's improvement has helped to pull down Tesco's market share in the period from 31.2 per cent last year to 31 per cent this year. After struggling to compete with discounters it is now facing stiff competition from big names like Asda and Waitrose. While Tesco saw sales grow five per cent, Asda increased its takings by 8.3 per cent.

WHAT THEY ARE SAYING:Nils Pratley in the Guardian: "It is … clear that the introduction of a cut-price "essentials" range has had a powerful effect. The cost in profits to Waitrose may turn out to be more than it bargained for, but Marks & Spencer, the other upmarket food retailer trying desperately to counter the impression that it's too pricey, would love to have the same problem. M&S's price tweaks took ages to have a modest impact on sales. At Waitrose, the response has been electric."

David Prosser in the Independent: "Back to the drawing board for Aldi and Lidl, the discount grocers that seemed poised to break through in the UK as recession-stretched shoppers turned to supermarkets offering the lowest prices. The latest TNS data on the groceries market, shows that while both are still expanding in the UK, their rates of growth have slowed markedly. Or, to put that another way, neither group is hanging on to all the shoppers that flooded into their stores at the end of last year." ·