UK grocery market growth falls back - Kantar

LONDON (Reuters) - Growth in Britain's grocery market slowed over the past month as cash-strapped consumers responded to the economic downturn, shifting spend to discounters Aldi and Lidl, industry data showed on Tuesday.

Market researcher Kantar Worldpanel said growth in the grocery market fell to 2.1 percent in the 12 weeks to July 8.

That compared with growth of 4.2 percent in the 2011 period and growth of 3.2 percent in the 12 weeks to June 10.

"We are seeing big cutbacks by consumers as they continue to respond to this current period of austerity," said Kantar Worldpanel director Edward Garner.

Shoppers are continuing to struggle with rising prices, muted wages growth and government austerity measures designed to cut record debt.

The Kantar data showed record market shares of 2.9 percent for both Aldi and Lidl, reflecting year-on-year growth of 26.1 percent and 11.5 percent respectively.

Garner also noted that while John Lewis's Waitrose still grew at over double the rate of the whole market, its growth fell back to 4.8 percent from the 7.5 percent reported last time, "suggesting there are signs that the premium sector is beginning to slow".

Among the big four supermarkets, fortunes continued unchanged with market share growth for Wal-Mart's Asda (up 0.5 percent year-on-year) and Sainsbury (up 0.1 percent) and share dips for Tesco (down 0.4 percent) and Morrisons (down 0.2 percent).

Kantar said grocery inflation was 3.8 percent for the 12-week period, continuing a downward trend from a November 2011 peak of 6.2 percent and reflecting lower inflation for fresh produce and falling milk prices.

Official data on Tuesday showed British inflation fell to 2.4 percent in June, its lowest in more than 2-1/2 years.

(Reporting by James Davey; Editing by Dan Lalor)