The party is over for the supermarkets

The past five years have been a story of almost unbroken growth for the big four supermarkets. Since the mid-decade recoveries at Sainsbury’s, Asda and Morrisons, general retailers have looked on in envy as the grocers appeared immune to fluctuations in the economy, while everything new that they tried seemed to work.

Now the party is over. The unprecedented squeeze on consumer spending is leading shoppers to cut back. Inflation is masking the level of volume decline, but there’s no doubt shoppers are buying significantly less, and are noticing that it’s costing more.

Putting aside Morrisons – which is prospering thanks to Dalton Philips’ energetic reinvention of the business, and its good fortune in not selling non-food – the other three of the big four aren’t growing their market shares.

Retailers can’t do much about whether the overall market is growing or shrinking. But the marked share gains of Aldi and Lidl at one end of the market, and Waitrose at the other, show shoppers are making a conscious decision to turn away from the mainstream grocers. Aldi’s 0.5% jump in a year in the Kantar till roll represents a dramatic recovery in fortunes.

Questions will be being asked in Leeds, Holborn and Cheshunt. Directors will be asking whether shoppers’ increasing rejection of their non-food offers is cyclical or part of structural shift to the web. They’ll be questioning whether putting down so much new space at a time when volumes are declining will dilute profitability.

Above all though, they will be asking why their messages aren’t cutting through with consumers. In a tough market, shoppers need to feel that the retailers they shop with are on their side. But instead, as Jamie Oliver might have said, they’re trying something new today.

The UK and Ireland’s retail scene is a rich patchwork of companies, people and places that touches the economic and social life of all parts of these islands. And while Retail Week always tries to reflect the retail scene in all regions, over the next seven weeks we’ll be putting the spotlight on different regions in our On the Road series.

While some complain that retail has become homogenous, nothing could be further from the truth. By exploring the interesting characters and businesses dotted all over the British Isles, we’ll be seeking to prove that.