Press Room

Big four supermarkets continue to be challenged by falling consumer spend per visit

London – 24 October 2014 – Sales at the UK’s leading supermarkets during the four weeks ending 11 October 2014 were down –1.5%¹ (in value) versus the same period a year ago – according to the latest data from global information and insights company Nielsen.  Sales volumes dropped -1.1%.

It is the eighth four-week period out of the last 10 to see a decline in year-on-year sales. The average shopper spend-per-visit at the big four supermarkets has now dropped 5% compared to a year ago, to £24.

“Despite better early autumn weather and high levels of promotional spend continuing (at 34% of sales), the big four supermarkets continue to be challenged by shoppers spending less per visit,” says Nielsen’s UK head of retailer and business insight, Mike Watkins. “Low food inflation isn’t helping, but it’s really being driven by shoppers continuing to seek value for money – although not necessarily the lowest price.”

Of the five largest supermarkets, the Co-operative and Asda were the only ones to see a year-on-year increase in sales over the last 12 weeks.  Aside from Aldi and Lidl, Waitrose and M&S outperformed the overall market the most.

On the Co-operative, Watkins notes: “The turnaround in the fortune of the Co-op continues, with its market share increasing to 5.9%.  A focus on ‘food to go’ categories and fresh produce, alongside store development, have contributed to shoppers visiting more frequently in recent weeks.”

Well-executed and timely advertising is impacting retailer performance

During the four weeks ending 11 October 2014, the leading supermarkets spent £28.4 million² on TV and press advertising, 3.6% less than a year ago.

In contrast, Lidl almost tripled (197%) spend to £4.9 million, second only to Asda (£5.0 million).

Watkins comments: “Although many shoppers expect lower prices from all the supermarkets, strong promotions and engaging advertising are just as important for driving shoppers in-store.  New TV advertising from Lidl and Aldi, focusing on saving money and offering good quality, is adding to the discounters’ sales momentum.”

Tesco’s TV and press advertising spend dropped 29% year-on-year to £3.0 million.

“With Christmas trading on the horizon, but little sales momentum across the Big Four and a risk of deflation by year end, it could be the catalyst for fewer but more targeted promotions,” concludes Watkins.

“With a falling spend-per-visit across many supermarkets, the battle to loosen consumers’ purse strings during the next eight weeks is set to be the toughest yet this year.  So, alongside lower prices, inspiring advertising which differentiates brands in consumers’ eyes will be vital to make an impact.”

Notes

All figures are from Nielsen Homescan Total Till unless otherwise stated
¹Source: Nielsen Scantrack Grocery Multiples
²Source: Nielsen Ad Dynamix

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 £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.

About Nielsen

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.