London, 14 February 2014 – Sales at the UK’s leading supermarkets in January were lower than a year ago.
Aggregate sales value growths during the four weeks ending 1 February 2014 were down -0.4%* year-on-year while unit sales (volume) decreased -3.2%* year-on-year.
“Despite the improving economy, UK consumer confidence actually dropped in the final quarter of 2013, indicating that it’s a shallow recovery in shoppers’ minds,” explains Nielsen’s UK head of retailer and business insight Mike Watkins. “Over half (55%) of consumers report switching to cheaper grocery brands to save money, so the record levels of January rainfall may have further dampened shoppers’ spend at a time they’re already actively cutting costs.”
Nielsen’s Consumer Confidence Index in Q4 2013 also revealed that over one third (37%) of consumers expect they’ll continue switching to cheaper grocery brands even when economic conditions do improve – up from 31% a year earlier¹.
Alongside consumer uncertainty, the UK’s 10 leading supermarkets spent 2.8%² less on TV and press advertising in this four week period (£20.1 million in total) than in the same period a year ago.
Sainsbury’s – the only one of the top 4 to increase market share year-on-year in the 12 weeks ending 1 February – spent the most on TV and press advertising in the final 4 weeks of the period (£4.1 million). This was also the biggest year-on-year increase (37%) in spend among the top 10 supermarkets.
Asda was the second biggest spender (£3.7 million) and had the second biggest spend increase (35%).
“Without a big upturn in advertising spend to offset consumer cost-cutting and the poor weather, we saw lower sales than a year ago in terms of both money in the till and units sold. The former is also partly due to the discounters such as Aldi and Lidl continuing to be the fastest growing supermarkets,” notes Watkins.
“Although we can expect a slow recovery in food retail up until the summer, the supermarkets will be hoping the World Cup and warmer weather kick-start consumer spend. Assuming underlying shop price inflation remains around 2% and consumer sentiment is broadly unchanged, we expect value sales growths to hit around 2%-2.5% later in the year.”
All figures are from Nielsen Homescan Total Till unless otherwise stated
*Source: Nielsen Scantrack Grocery Multiples
¹Source: Nielsen Survey of Consumer Confidence and Spending Intentions
²Source: 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.