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INSIDE TRACK: Big four stores will gear up to face online threat

ANTI-SUPERMARKET campaigners will no doubt be rubbing their hands in glee at the largely disappointing Christmas retail sales figures posted by the dominant multiples.

Like-for-like sales at Morrisons fell 5.6% in the six weeks to January 5, while market leader Tesco was down by 2.4%, Sainsbury's reported a paltry 0.02% increase and Asda has yet to report. The British Retail Consortium said there has been a 0.6% decline in food sales during the past quarter.

As one industry insider put it, life has certainly been a grind for the mainstream grocery brigade.

By contrast, both the upmarket and discount sectors did relatively well. M&S Food was up l.5% and Waitrose romped ahead with sales up by 3.1%.

At the same time, industry data published by Kantar Worldpanel showed more than half of UK households shopped in Aldi or Lidl in 12 weeks to December 8.

It's a fair bet that their latest figures, out tomorrow, will indicate this trend won't have reversed. With food inflation and tighter-than-tight household budgets to contend with, it appears our habits are finally shifting.

However, it would be premature, for those so inclined, to start stockpiling the champagne in celebration of the demise of the big four, even if we have evidently turned our backs on the edge-of-town hypermarket behemoths.

Food and grocery shopping is here to stay: the Institute of Grocery Distribution (IGD) predicts that by 2018 the UK market will increase by over a fifth from its current value of £170bn to £206bn.

It's just that we're doing it differently. I reckon 2013 will go down in history as being the year in which the great British public positively embraced the concept of "multichannel shopping", using our computers, tablets and mobile phones to order food online.

The Office for National Statistics, which bases its comprehensive reports on a survey of 5000 food retail outlets, will release its latest figures on Friday, and early indications are, as a spokesman for the office delicately put it, that online shopping "has really shot up".

The IGD goes further by predicting that online activity will more than double between April 2013 and April 2018, a leap in value of 123% from £6.5bn to £14.6bn - the most significant growth of all shopping options. The superstores and hypermarkets' value will only grow by 8% in the same period.

We shouldn't forget the benefits of online business for the small artisan producer - especially those in remote locations. Internet ordering helps them bypass the expensive middle-men traditionally involved in getting a product to market, and so allows them compete on a more level playing field.

Gigha Smoked Halibut, for example, entered the online market for the first time in 2013 and saw an instant leap of 50% in sales.

The big four will be taking heed. Those retailers with the most efficient online systems are the ones that have won out this year: Morrisons admits its historic reluctance to embrace online is what did for it, and has swiftly addressed the situation.

Now we have a new irritant to contend with: the constant stream of delivery vans coming to a neighbourhood near you.

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Food and drink

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