Turning to permanent price cuts to combat discounters – as nearly half of households now shop there
London, 5 April 2016. The proportion of consumer spend at U.K supermarkets that goes on items on promotion has hit its lowest level in over seven years, according to the latest data from global information and insights company Nielsen.
In the four weeks ending 25 April 2016, 29% of spend at U.K supermarkets went on products with temporary price cuts or multi-buy offers, the lowest level since February 2009 (also 29%).
Mike Watkins, Nielsen’s U.K head of retailer and business insight, explains: “Over the last two years, around 34% of a typical supermarket shopping bill went on promotional items. However, to help combat the rise of the discounters, supermarkets are now turning temporary price reductions into permanent cuts. Consequently, there’s now less promotional activity as many prices are cheaper all-year round.”
Aldi and Lid’s share of the grocery market reached 11.5% in the 12 weeks ending 25 April 2016, compared to 10.1% a year ago – a relative rise of 13.9%. Nearly half of all households now shop at a discounter every month – up from 40% two years ago.
All four of the major supermarkets saw a decline in sales. Aside from the discounters, only Marks & Spencer (3.1%), Waitrose (2.6%) and The Co-Operative (1.6%) saw higher sales than a year ago, and a rise in market share.
“Only M&S, Waitrose and the Co-op seem able to fight off the rise of the discounters and attract more shoppers, which is set to become even harder in the second half of 2016 as both Aldi and Lidl open more stores” says Watkins. “The Co-operative Group, for example, has opened more convenience stores to capture a greater share of ‘little and often’ shopping trips, typically no more than 10 items.”
Due to Easter falling earlier this year and not in the latest four-week figures, sales value was down -5.1%¹ and volume down -3.6%¹ versus the same period a year ago – which did include Easter.
Watkins explains: “Looking across the last 8 weeks, to negate the Easter impact, value growths were still down 1.3% and volume down 1.1%. Prices are lower than a year ago and there’s been little sales momentum at the supermarkets since Easter, not helped by the cool weather. Some sunshine over the next few weeks could be the kick-start for sales growth the industry needs.”
All figures are from Nielsen Homescan Total Till unless otherwise stated
¹Source: Nielsen Scantrack Grocery Multiples
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 £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.
Nielsen Holdings plc (NYSE: NLSN) is a global performance management company that provides a comprehensive understanding of what consumers Watch and Buy. Nielsen’s Watch segment provides media and advertising clients with Total Audience measurement services across all devices where content — video, audio and text — is consumed. The Buy segment offers consumer packaged goods manufacturers and retailers the industry’s only global view of retail performance measurement. By integrating information from its Watch and Buy segments and other data sources, Nielsen provides its clients with both world-class measurement as well as analytics that help improve performance. Nielsen, an S&P 500 company, has operations in over 100 countries that cover more than 90 percent of the world’s population. For more information, visit www.nielsen.com
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