The unpredictable weather has again disrupted grocery spend and stalled the industry’s momentum, with sales at the UK’s leading supermarkets growing at their lowest rate for nearly fifteen months.
In the four weeks ending 21 April 2018, sales rose by 1.2% year-on-year – the lowest rise since January 2017 (excluding seasonality-affected periods).
A significant change in the weather can give supermarket sales as big a boost as an important event such as Easter, which is what happened in the week ending 21 April this year. The three days of hot weather helped sales jump 11% year-on-year. In that week of good weather, shoppers spent £11m¹ on sun care products (nearly treble the amount in the same period last year) and £28m on ice cream (double last year). Mixers for alcoholic drinks also saw particularly strong growth (up 51%) as did cider (up 46%). However, this wasn’t enough to offset the previous three weeks of poor weather.
In addition to the overall slowdown in the amount shoppers spent, the number of items purchased year-on-year remained flat¹ – the poorest growth figure for nearly five months – which shows shoppers are still cautious about spending despite food price inflation slowing down.
How the individual supermarkets performed
Across the twelve weeks ending 21 April, Asda’s sales momentum continued, having the most improved year-on-year performance of the top four supermarkets, with sales up 2.3%. Its share of the grocery market stands at 13.9% and would mean a combined market share with Sainsbury’s of 28.8% if the proposed merger went ahead – above Tesco’s 27.1%.
Both retailers have over half of all households as shoppers every 12 weeks, while over three-quarters also visit Tesco. This illustrates how competitive the retail landscape is, which is why we’re seeing further consolidation within the industry.
Sainsbury’s sales grew 0.2% year-on-year, while Tesco’s grew 2.2%. Overall, Iceland (up 3.6%) had the best growth figures outside of the discounters, where Aldi’s year-on-year growth (10.3%) edged ahead again of Lidl’s (9.3%).
Looking ahead, sales momentum will be kick-started by any sustained period of warm weather and the proximity of the two bank holidays in May plus the Royal Wedding. This is all good timing, with the activation of promotions around the football World Cup kicking off soon after. These three events should be enough to return the industry to volume growth during the next eight weeks.
All figures are from Nielsen Homescan Total Till unless otherwise stated.