In an effort to counter slowing sales growths since the summer, the UK’s major supermarkets have spent 14% more on TV and press advertising in the four weeks to mid-October than in the same period last year.
Meanwhile, aggregate sales value growths for the UK’s leading supermarkets during the four weeks ending 12 October 2013 were up just +1.8%* year-on-year; unit sales (volume) decreased -1.9%* year-on-year – according to the latest retailer performance figures released today by global information and insights company Nielsen.
The weak sales growths are indicative of consumers being reluctant, unwilling or unable to spend – despite their slightly more optimistic outlook in recent months. Consequently, to encourage sales, in-store promotional spend is being maintained at 35% of sales, with particularly high levels at Waitrose (41%) and Morrisons (40%).
Strongest category growths – in Confectionery and Soft Drinks – driven by promotions
The strongest category growths were in the heavily promoted categories of Confectionery (+8.6% value year-on-year) and Soft Drinks (+4.9%), the latter also benefiting from September’s warm weather.
The weakest growths were in Packaged Grocery (-0.1%) and Household (+0.3%) – two FMCG categories where the Discounters, such as Aldi and Lidl, are consistently growing market share.
TV and Press advertising spend
Driven by Morrisons, TV and press advertising spend by the 10 leading UK supermarkets in the four weeks ending 12 October was up 13.8%** over the same period a year ago to £28.3m.
Morrisons was the highest spending food retailer on TV and press in these four weeks (£5.0m), followed by Tesco (£4.0m) and Asda (£3.7m). Iceland had the biggest year-on-year increase in spend (up 426% to £2.2m) followed by the Co-operative (up 167% to £2.1m).
On the back of its significant increase in media spend, Iceland has continued a gradual gain in market share, despite industry-wide softness in the Frozen Food category where value growths of +0.7% remain lower than overall inflation. Sainsbury has also increased market share and strengthened its position as the overall number two retailer across the industry.
Retailers will be hoping the recent rise in consumer confidence translates into increased shopper spend and more encouraging figures for Christmas and 2014. But to drive sales in the meantime, we anticipate they’ll continue increasing ad spend to support their Christmas campaigns and promotions.
Table: 12-Weekly % share of grocery market spend by retailer and value sales % change
|% share, 12 weeks to 12 Oct 2013||% share, 12 weeks to 13 Oct 2012||% sales change vs. same 12 weeks year ago|
|MARKS AND SPENCER||3.0%||2.9%||4.9%|
The figures in the table are based on 12 weeks sales through to 12 October 2013 compared with the same 12 week period ending in 2012
Source: Nielsen Total Till, Nielsen Homescan
All figures are from Nielsen Homescan Total Till unless otherwise stated
*Source: Nielsen Scantrack Grocery Multiples
** Source: Nielsen Ad Dynamix
About Nielsen Homescan Total Till
The Nielsen continuous 14,500 GB household panel is geo-demographically balanced and designed to measure household purchasing through a wide range of channels. It includes all food and drink and non-food spend (e.g. household, personal care, clothing, electrical, cards and stationery, toys, music, general merchandise, etc). It represents the total amount paid (after all coupons and vouchers), found on the till receipt.
About Nielsen Scantrack
The Nielsen scanning service that measures total store sales every week by SKU for 15,000 shops across all food and drink trade channels in GB. This uses the actual EPOS data from retailers, thus, Scantrack is the most robust and reliable measure of FMCG sales and is integrated with Homescan for the key indicators of retailer and category performance. The total market measured is £140bn per annum. ‘Grocery Multiples’ is a defined sub-set of the major supermarkets that also includes all food sales from Marks and Spencer (but excludes Aldi and Lidl). The Grocery Multiples account for over £117bn of all GB food, drink and supermarket general merchandise sales.
Mike Watkins is UK head of retailer & business insight at Nielsen