Summer weather improves UK retail grocery sales

Market conditions appear to have improved for British supermarkets, as headline value growth from the UK’s grocery multiples has increased to +3.7% from +1.9% in the four weeks to 6th August,according to the latest retailer performance figures released today by Nielsen (Source: Nielsen Scantrack).

While this headline level of growth is now back closer to the 52-week trend, it’s primarily being driven by inflation, as volume growth continues to be negative at -0.8%, albeit up from -1.7% on the previous four weeks (Source: Nielsen Scantrack).

Mike Watkins, senior manager Retailer Services at Nielsen, comments:  “The grocery multiples have had a pretty good month.   With many areas of the country enjoying more settled warm weather, there have been more opportunities for outdoor eating and entertaining.  Over the last 12-week period, growths in Fresh Foods improved – with Deli up 4% on the same period last year and Fresh Meats up 5% – while Bakery maintained its 5% growth.  Similarly, the Beer, Wines & Spirits category saw very good growths of 10%, though this rally was emphasised by slow sales a year ago in the period directly after the World Cup.”

Other categories were less buoyant.  With the start of the summer holidays bringing the need for families to save a little money, Packaged Grocery growths moderated to 4%, as shoppers destocked their cupboards.  General Merchandise also slowed to 1% growth, impacted by discounting around Back to School, but there has also been an underlying unit decline of -6% over the last 12 weeks, as shoppers cut back on discretionary spend.

Watkins sums up: “Supermarkets are having to battle hard for customer loyalty.  Shoppers, who continue to put a limit on their overall spend, are taking advantage of promotional offers, price cuts, coupons and now fuel discounting.

“The increasing price of petrol and diesel is now one of the top-five concerns for households over the coming six months, which could mean less travelling and fewer shopping occasions.  That’s why the major supermarkets have all responded by giving further cash savings to shoppers to help stimulate how often they visit.”


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