London, 11 April 2014 – Grocery sales at modern convenience stores are on the rise, bucking the continuing trend of slowing grocery sales at the UK’s leading supermarkets, according to the latest data from global information and insights company Nielsen.
During the four weeks ending 29 March 2014, consumers spent -4.3%* less (value) at the UK’s leading supermarkets than the same period a year ago, buying -4.8%* fewer units. However, the declines are due to last year’s Easter build-up, which always boosts sales at out of town stores, occurring in the corresponding period.
In contrast, value sales at the smaller convenience stores were up +0.6%* year-on-year, despite last year’s early Easter.
“The underlying trend of shoppers moving away from larger to smaller stores continues,” says Nielsen’s UK head of retailer and business insight Mike Watkins. “Historically, traditional convenience stores were used for immediate or ‘distress’ purchasing, however, the huge investment by the major supermarkets has transformed this format. The likes of Tesco Express, Sainsbury’s Local and Co-operatives now offer a greater variety of food and drink which can be purchased ahead for the next few days, so basket sizes and spend per visit are increasing.”
Although grocery trips that involve buying 1-5 items account for the majority (54%) of visits, they’re becoming less popular at the expense of 6-10 item baskets which now account for 20% of all trips – up 2.2% annually¹.
Watkins again: “It’s these 6-10 item shopping trips that are becoming the new battle ground in Convenience.”
Aside from location (51%), value for money (43%) is the main reason why people choose where they do their “top up” grocery shopping – cited by twice as many shoppers than low prices (21%)².
Again, due to last year’s early Easter, the UK’s 10 leading supermarkets spent 35%³ less on TV and press advertising in the four weeks ending 29 March (£23.0 million in total) than in the same period a year ago.
Tesco spent the most on TV and press advertising in this period (£5.0 million), narrowly ahead of Asda (£4.9 million). Iceland had the biggest year-on-year increase in spend (+93%) among the top 10 supermarkets. Lidl (+49%) and Asda (+2%) were the only other two to increase spend year-on-year.
Watkins concludes, “Overall, trading momentum continues to be slow for all supermarkets ahead of Easter, particularly with slowing food inflation. The recent round of price cuts by some supermarkets, noticeably Morrisons, to stimulate sales hasn’t yet changed the retail landscape and is likely to take months to achieve.
“Waitrose and M&S continued their strong sales performance while Asda was the pick of the top four. The Co-operative is also benefiting from the shift towards convenience shopping, with trend figures better than all the top four. Shoppers continue to economise – but not compromise – and Aldi and Lidl still seem immune from weak consumer demand, entering the Easter trading period with even stronger momentum than last year.”
All figures are from Nielsen Homescan Total Till unless otherwise stated
*Source: Nielsen Scantrack Grocery Multiples
¹Source: Nielsen Homescan, 52 weeks ending 4 January 14
²Source: Nielsen Homescan Survey, January 2014
³Source: Nielsen Ad Dynamix
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.
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.
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 and mobile measurement. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA and Diemen, the Netherlands. For more information, visit