Champagne and discounts on the menu as credit crunch bites

Oct 1 2008 by Alex Turner, Liverpool Daily Post

As the credit crunch bites deeper, shoppers are changing their habits, as Alex Turner reports

EVIDENCE is emerging that shoppers are chang-ing their habits in re-sponse to the credit crunch and the subse-quent economic downturn. However, the picture isn’t completely clear.

Upmarket supermarket chain Waitrose is reporting sales of Cham-pagne up by 10%, while its aged Aberdeen Angus is up 110%.

At the same time, discount super-markets Aldi and Lidl are reporting growth in their market share.

In the 12 weeks to mid-August, Aldi enjoyed growth of nearly 20% and Lidl saw sales rise 12%. By contrast, Waitrose saw its sales increase less than 2%, below the rate of food inflation.

Statistics have rarely presented as confused a picture as those being produced to explain the state of retailing in the UK.

Official retail sales figures, released by the Office of National Statistics, showed sales in August were 3.9% higher than a year ago, a healthy picture which was contradicted by the British Retail Consortium’s measure showing growth of just 1.4%.

The phenomenon of downgrading is used to explain how shopping habits are changing. Downgrading has hit most retailers as shoppers choose cheaper options or change their choice of shops, moving from luxury retailers to mid-market or mid-market to value.

In the case of Waitrose, while it is losing out as people trade down from organic products, it is benefiting as shoppers choose to stay at home rather than eat out.

That has led to a marked increase in sales of its As Good As Going Out range, which has risen one-third, and led to the rise in popularity of its meats and Champagne.

“I think you have to go back to the early 1990s for the last time people started to shop as differently as they are now,” said Mark Price, managing director at Waitrose.

“It's really difficult to read the patterns. At one end, our As Good As Going Out range is massively up, Champagne is up 10%, and aged Aberdeen Angus is up 110%.

“But the other thing is that people have gone from organic to free range and are buying promotions much more. Around 30% of the things we now sell are on promo-tion, up from 20%.”