October 15, 2008 | posted by Michael Baxter in High Steet |

Well, Iceland the country may not be doing very well at the moment, but Iceland the superstore is. Then there’s Aldi. Aldi’s problem is that it does have a somewhat down-market image. You may have noticed from its TV ad recently that the store is trying to change that image.

One thing seems to be for sure – 2008 is set to be the year of the budget grocers.

Iceland has seen its turnover in the 12 weeks to October 5 rise 11.8 per cent from the same period a year earlier, giving it the second-highest growth rate of all grocers in the UK. Number one, however, was Aldi.

According to TNS, Aldi enjoyed a record-breaking growth rate of 22.1 per cent for the latest 12 weeks. Its market share has risen to 3.0 per cent, from 2.6 per cent a year ago. TNS said that Aldi’s “… current on-air TV campaign features celebrity Phil Vickery in an attempt to add food quality to the established low-price reputation.”

As for the rest of the pack, Tesco’s market share has fallen slightly from 31.8 to 31.4 per cent, although sales were still up 5.5 per cent.

Asda and Morrison have both seen a good year, with the UK’s number two supermarket seeing market share rise from 10.9 to 11.2 per cent.

Sainsbury’s famous recovery does a look a little …, well, a little like no recovery at all. Sure, sales were up 5.6 per cent, but market share reduced some more. A couple of years ago, many experts were predicting Sainsbury’s would be back in the number two slot by now. Its market share is now 15.7 per cent, and Asda’s lead is growing.

Not surprisingly, Waitrose’s market share fell slightly. Sales were up a mere 1.6 per cent, meaning the supermarket saw the worst performance of all the retailers named by TNS, except for the troubled Somerfield. Not so long ago, John Lewis and its grocery subsidiary Waitrose could do no wrong. But that has changed. The British shopper is on the hunt for bargains.

And that is one of the reasons inflation will never take off like it once did. These days, we are less accepting of price rises. Time was when most of us did our shopping locally. If prices rose, well, we just got on with it. Now, many of us drive miles to a local hypermarket, and if you are going to do that, you might as well drive to the one with the best prices.