British shoppers spend 33p in the pound at supermarkets

Shoppers now spend 33p out of every £1 in the big supermarket chains, according to a report published yesterday.

The finding from a leading grocery think-tank illustrates the growing dominance of Britain's major chains.

Consumers spent £115bn in grocery stores of all types last year, of which £80.8bn was spent in Britain's nine biggest supermarkets, the study by IGD (formerly the Institute of Grocery Distribution) found.

Groceries are now the third biggest outlay for households after housing and transport, despite the fact that average food prices are rising at a slower rate than inflation.

The IGD has calculated that grocers take 49p of every £1 spent by Britons at retail outlets. Some 33p of that is spent in large supermarket chains ­ up from 30p in 2002, according to the think-tank's report.

It identified the big chains as: Tesco, Asda, Sainsbury's Morrisons, Safeway, Waitrose, Somerfield, Marks & Spencer and Iceland. One of the reasons why big supermarket chains like these have prospered was their move into new product lines such as homeware, including toasters and kettles.

A separate report published in The Grocer trade magazine shows that supermarket "non-food" sales soared by 12.2 per cent to £11.6bn in the 12 months up to 3 July this year.

A major area of growth was in sales of electrical goods, which rose 28 per cent to £879.6m, according to the study from the analyst Information Resources. Computer games also sold well in the big supermarket chains, with sales up 11.8 per cent to £88.9m, while homeware sales increased 10.7 per cent to £769m.

Experts at the IGD believe that the grocery market will be worth £118.1bn by the end of the year, growing by 2.5 per cent a year to £133.5bn in 2009.

The think-tank's report predicts further expansion by supermarket chains into the small convenience store sector, which would be at the expense of family-run corner shops. It says that the number of independent convenience shops will fall from 28,220 to 24,284 over the next five years.

The number of small-scale outlets, such as Tesco's Metro chain, is predicted to increase from 2,213 to 2,333.

While there may be fewer fully independent stores, it seems many could decide to opt for the benefits of joining a "symbol" group such as the Spar chain.

Some 14,358 grocers will be affiliated to one of the groups, which supply grocers and offer marketing ­ up from the current figure of 12,780.

David Gordon, business manager of IGD, said that recent trends had been good news for the consumer: "With food price inflation consistently below background inflation, food is cheaper than ever and consumers have been offered better value in terms of quality, choice and price.

"Against this background the food industry has still achieved growth and this is testament to the very strong retailing skills in our sector," Mr Gordon said.