Grocery sales remain buoyant despite winter storms and slowing inflation

Grocery sales remain buoyant despite winter storms and slowing inflation

Slowing price inflation and the recent Siberian-like weather failed to derail the strong growth rates seen across the UK’s leading supermarkets.

The winter weather in late February and early March certainly disrupted shopping patterns but not enough to knock food retail out of its stride. Although the bad weather meant the number of visits to grocery stores fell during the four weeks ending 24 March, the amount of items shoppers bought rose by +0.4%¹ year-on-year – the second highest rise since 2016 (excluding seasonality-affected periods).

Three categories in particular benefited as shoppers stocked up in advance of the storms; beers, wines and spirits saw a 7% year-on-year rise in sales during the four week period, frozen foods rose +5%, and packaged groceries +4%. In contrast, fresh produce sales fell -2%.

This, combined with inflation, meant shoppers spent 3.3% more on groceries compared to the same period last year (or 2.6% more, excluding the discounters¹).  This is built on the big four supermarkets having adapted well to changing market conditions and consumer behaviour, and the sector has effectively seen 13 straight months of growth above 2%.

This is in stark contrast to non-food retail who are still adapting to their changing marketplace.

How the individual supermarkets performed

Over the twelve weeks ending 24 March, Tesco had the most improved year-on-year performance among the top four supermarkets, with sales up 3.1% – its fifth consecutive period of 3%+ growth. This was followed by Asda (2.9%) “whose recovery in sales continues to gain momentum,” notes Watkins.

Overall, Iceland (up 3.9%) had the best growth figures outside of the discounters. In contrast, even though they’ve gained shoppers, M&S sales (up 1.3%) have started to slow due to fewer store openings than a year ago.

The recent Nielsen Consumer Confidence survey showed that 48% of shoppers are looking to save money, so some may be cutting out ‘unnecessary’ trips as part of carefully managing household finances. Furthermore, with a cold, wet and early Easter unlikely to have helped underlying sales as much as hoped in the last few days, all retailers will now be keeping an eye on the start of a late spring and the May Bank Holiday to kick-start spend. However, the good news is that supermarket food inflation is now slowing which might help shoppers spend more on impulse categories.

All figures are from Nielsen Homescan Total Till unless otherwise stated.
¹Nielsen Scantrack