Biggest year-on-year decline in volumes purchased since Nov 2014
The volume of items purchased from the U.K.’s leading supermarkets has decreased year-on-year for the fifth consecutive month. During the four weeks ending 30 January 2016, sales volumes declined -0.8%¹ – the last time they fell more than this was the four weeks ending 8 November 2014 (-1.1%). Sales value declined -0.6%.
Half of consumers are changing their spending habits to save money², including chasing price cuts around different stores. This promiscuity is characterised by consumers shopping more often at more places while buying less, and that’s hurting supermarket performance. Asda, in particular, is being impacted by this disloyalty as low prices are no longer a clear differentiator when so many supermarkets price match.
Asda had the largest drop (-4.4%) in year-on-year sales among the top 10 supermarkets during the 12 weeks ending 30 January 2016.
Sainsbury’s was the only top-four supermarket to see an increase (0.2%) in year-on-year sales.
Aldi’s sales were up 18.7% year-on-year whilst Lidl’s were up 17.2% – the discounters’ combined market share is now 11%, up from 9.4% a year ago. Apart from the discounters, Marks & Spencer had the biggest year-on-year uplift in sales (6.2%).
Sainsbury’s is the top four’s best performer and is successfully attracting new shoppers without relying on promotions as much as last year, or as much as other retailers. In contrast, promotional activity increased at Waitrose in the last four weeks at the same time as sales slowed. Across the market, the proportion of sales purchased on promotion fell again to under 31%.
Although most grocery retailers attracted new shoppers in January, in reality, these will be less valuable shoppers, spending less per visit than regular, loyal, shoppers. The challenge is how individual retailers can differentiate themselves to persuade people to return again in February and spend more. The supermarkets need to up their game in this regard, as Aldi and Lidl have certainly been the most effective at doing this over the last two years.
All figures are from Nielsen Homescan Total Till unless otherwise stated
¹Source: Nielsen Scantrack Grocery Multiples
²Source: Nielsen Consumer Confidence Index, Q4 2015
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 £145bn 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 £121bn of all GB food, drink and supermarket general merchandise sales.