Supermarket sales growth slows

The major supermarkets have reported a slowdown in growth, with sales increasing by only 0.1% for the 12 weeks ending 24 April 2016 compared to the same period last year, according to the latest grocery share figures from Kantar Worldpanel, published today (Wednesday 4 May 2016). 

“Consumers are enjoying a golden period of cheaper groceries with like-for-like prices falling every month since September 2014,” said Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel.

“Nearly two years of falling prices mean the average household is spending £78.10 a week in the supermarket, so consumers have annually saved more than £400 than if prices had risen at the same rate as the last decade.”

He added that lower prices are not the result of more groceries being bought on promotion. “In fact promotional levels fell in the last year – in the past 12 weeks 38.5% of spend was on promoted goods, a decline from the 39.8% last April,” McKevitt explained.

“Retailers are aiming for simplicity in their pricing and only a quarter of promotional spend is now through multibuy deals – a 24% drop on last year. This change has been evident across every grocer but most notably in Sainsbury’s, where only 7% of deals are now multibuys. Straight price-cut deals tend to offer greater discounts so shoppers will see these as a welcome benefit across the market.”

According to Kantar Worldpanel, volume growth of 1% is in line with the growth in Britain’s population. “Individual households have stopped increasing the amount of groceries they buy and, while it is tempting to correlate lower volumes with the uncertainty surrounding the EU referendum, there is no evidence that supermarket purchasing has any significant link with consumer confidence.”

Despite a difficult market backdrop, the Co-operative has seen sales grow by 3.3% year-on-year, with its market share rising to 6.2% due to refurbished stores and an improved range resulting in shoppers visiting more frequently and spending more per trip.

Meanwhile, Waitrose also gained market share up 0.1 percentage points to 5.2% on the back of a 1.5% sales growth. However, the larger supermarkets did not perform so well. “Sainsbury’s was the best performing, though sales fell back by 0.4% - the first time the retailer has dipped into decline since July last year, though it retained its 16.5% share of the market,” McKevitt continued.

“This marks the first time that each of the big four has simultaneously witnessed a drop in sales since April 2015.”

Morrisons is feeling the impact of having less store space than last year, with sales down by 2.6%. Tesco also experienced a fall in sales by 1.3%, while Asda saw sales fall by 5.1%.

However, the discounters have maintained the record share high of 10.4%, which they reached last month. At sales up 15.4%, Lidl was the fastest growing as shopper number increased by 648,000. Sales were up by 12.5% in Aldi, as the supermarket added an additional 732,000 shoppers in the last 12 weeks – more than any other retailer.

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