Super Thursday has come to pass and we therefore have a bit more clarity on supermarket performance over the key Yuletide period.
Sifting through the releases, the most immediate conclusion is that the entire universe is turning vegan or has a food allergy, such were the growth rates reported for meat-free and free-from products.
While a bacon cheeseburger will have to be prised from my cold, dead hands, there is little doubt that a dietary evolution is well underway – and I’ve been impressed by the responsiveness and agility demonstrated by many major grocers in addressing this new and lucrative opportunity.
We can debate until the meat-free cows come home about how well the discounters did in terms of like-for-like growth, but the market share data this week signalled that they grew strongly once again, largely powered by new space. However, the improvements in their seasonal ranging are beyond doubt and their performance in booze and premium appears to have been stellar.
This also raises an interesting issue about our collective obsession with like-for-likes as a key metric. Ditto market share. It is becoming more and more apparent that profitability and operating efficiencies are perhaps more of an objective than blindly chasing sales.
Most major operators outside of the discounters are being a bit more choiceful when it comes to expansion through new space – working existing assets harder appears to be the order of the day for many.
Did premium lose its pull?
One telling observation from the recent flurry of trading statements was the absence of big numbers around premium private label growth. In years gone by, the listed three of the big four have typically proudly announced punchy growth for their top tier lines, but this was not the case this time around.
While Dave Lewis was keen to point out that he did not recognise this phenomenon from a Tesco perspective, my sense would be that the traditional ‘trading up’ was muted this year.
Enough looking back. What lies ahead? Well, we have the prospect of a combined Sainsbury’s and Asda that should escape a severe mauling from the authorities if they hopefully see sense and take a broader view of what the grocery market actually is.
We have big anniversaries for Tesco and Sainsbury’s (turning 100 and 150 respectively this year) which are already being used in marketing endeavours.
Convenience and online will continue to grow. The former is ticking along nicely, helped in part by some exemplary work from the largely unsung hero that is the Co-op, while 2019 will be the year that online starts plateauing.
Most online grocers, with the exception of Ocado and Amazon, have really rowed back on new shopper recruitment and it has not gone unnoticed that some click-and-collect facilities have bitten the dust.
A lot obviously hinges on what does or doesn’t happen with Brexit and any impact on food imports, but one thing is totally guaranteed: the UK grocery market will continue to be a fascinating and surprising sector.