UK supermarkets to rely on advertising and promotions to drive Christmas trading

Contact: Neil Beston, Tel: 020 3103 3959

LONDON – 19 December 2012 – The UK’s leading supermarkets will be relying on strong advertising in the final weeks of Christmas after another month of slowdown in year-on-year sales value growth due to a continued weakness in General Merchandise – such as electronics, toys, clothes and home furnishings.

According to the latest retailer performance figures released today by global information and insights company Nielsen, aggregate sales growth for the UK’s leading supermarkets during the four weeks ending 8 December was up +1.3%* year-on-year. For the previous four week period (ending 10 November), year-on-year sales value growth was +2.0%*.

Unit sales (volume) actually declined by -0.5%* year-on-year – compared to 0.8%* year-on-year growth for the previous four weeks.

However, if General Merchandise figures are excluded,  sales growths for the four weeks ending 8 December are more encouraging at +2.2%*, whilst unit sales are down just -0.2%*. This indicates that so far this Christmas, food and drink categories are holding up better than expected considering the continued squeeze on household spending.

FMCG growths are being helped by the percentage of sales purchased ‘on offer’ remaining close to an all-time high at 36% with sharing and festive categories, in particular, being heavily supported by in-store promotions.

The end of November saw a significant increase in TV and Press advertising particularly around wines, spirits, beers and seasonal products ahead of Christmas. During the four weeks ending 2 December, Tesco was the highest spending supermarket on TV and Press at £11.8m just ahead of Asda at £11.2m, then Sainsbury £7.3m and Morrisons £7.1m – all with figures lower than at this stage last year.  In contrast, TV and Press spend for Aldi – the next biggest spender – was up significantly (+36%) to £6.5m**.

Explaining the figures, Nielsen’s UK head of retailer insight Mike Watkins, “The sluggish sales figures are partly due to shoppers delaying the big shopping trips until the final week before Christmas when fresh foods are also purchased.  Because shoppers are planning visits to take advantage of the many offers available this year we, therefore, expect continued use of media spend across all channels in the next few days to encourage them into store and to buy any remaining indulgencies at the same time. With Aldi and Lidl also promoting premium food and drink in a big way and targeting more affluent shoppers this Christmas, there is still a lot to play for this weekend.”
 
Commenting on Tesco’s performance over the four weeks ending 8 December, Watkins says, “Whilst the market has slowed since the start of October, Tesco growths have improved and there was new momentum in the last four weeks – helped by the continued use of vouchers and coupons as well as some in-store promotional offers that resonated with shoppers. Tesco are now in a much better position than last year for a strong finish to Christmas.”

*Source: Nielsen Scantrack Grocery Multiples
**Source: Nielsen Ad Dynamix

12-Weekly % Share of grocery market spend by retailer and value sales % change
Retailer
% share, 12 weeks
to 8 Dec 2012
% share, 12 weeks
to 10 Dec 2011
% value change vs same
12 Weeks Year Ago
TESCO 28.7% 28.9% 2.5%
ASDA 16.5% 16.8% 1.4%
SAINSBURY 15.9% 15.9% 3.4%
MORRISONS 10.9% 11.4% -0.9%
CO-OPERATIVE 6.8% 6.9% 1.4%
WAITROSE 4.2% 4.0% 8.5%
M&S 3.5% 3.6% 1.3%
ALDI 2.9% 2.1% 43.6%
LIDL 2.1% 2.0% 10.1%
ICELAND   2.0% 1.9% 4.4%

The figures in the table are based on 12 weeks sales through to 8 December 2012 compared with the same 12 week period in 2011.  Source: Nielsen Total Till, Nielsen Homescan

About Nielsen Homescan Total Till:
Unless otherwise stated, data is based on all purchases, bar-coded and non bar-coded, brought back into the home from any outlet by an in-home scanning panel of more than 14,500 households. Total spend includes all items stocked by any outlet, including grocery, general merchandise and clothing.

About Nielsen
Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and related properties. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA and Diemen, the Netherlands. For more information, visit www.nielsen.com.