London, 9 May 2014 – After two months of weakening growths, the late Easter provided a timely boost for the UK’s leading supermarkets, helping sales value growths hit +5.3%*, according to the latest data from global information and insights company Nielsen.
During the four weeks ending 26 April 2014, sales volume was also up as consumers bought +1.2%* more units than the same period a year ago. In the week leading up to Easter (week ending 19 April) sales value growths were up +16%* year-on-year – due to Easter having already occurred before the corresponding period last year.
“The late Easter, however, masks the reality that the current trading environment is soft compared to a year ago and there is little momentum in the amount of groceries people are buying,” says Nielsen’s UK head of retailer and business insight Mike Watkins.
“The amount being spent continues to be impacted by a combination of record low food inflation (+0.7%¹) and many supermarkets’ competitive pricing policies. Although this is good news for shoppers, it’s not so for the retailers whose margins are now coming under increasing pressure.”
Spend on grocery and household items moving away from the major supermarkets
The performance between categories was mixed over the period. Although sales of Confectionery, Beers/Wines/Spirits and Fresh Meat/Poultry outperformed the overall market, the amount consumers spent on Grocery (-2.5%) and Household (-2.7%) goods fell year-on-year in the last four weeks, as more of these items are now being purchased at the Discounters and High Street value retailers.
Sales growth at Aldi still has strong momentum (+37%), while growth at Lidl (+22%) is accelerating, with both well above the overall market rate for the last 12 weeks. Lidl undertook a massive increase in national TV and Press advertising spend – up 187%² year-on-year – to support the extension of its Deluxe ranges for Easter. Lidl’s spend of £3.7 million during the four weeks ending 26 April was the fourth highest of the grocery retailers, behind Tesco, Asda and Aldi.
What does the next six months hold?
“Retailers will be relying on improving summer weather and the forthcoming World Cup to drive sales,” Watkins concludes. “However, although consumer confidence is recovering, people’s willingness to spend is improving more slowly. Over a third of Britons are switching to cheaper grocery brands to save money³ and nearly a quarter expect to continue doing so, even when economic circumstances improve.
“The eventual impact of any major price cutting, such as that employed by Morrisons, could be a catalyst to supermarket growth in the second part of the year. If so, we’re expecting a return to positive volume growth across the industry later in 2014.”
All figures are from Nielsen Homescan Total Till unless otherwise stated
*Source: Nielsen Scantrack Grocery Multiples
¹Source: BRC Nielsen SPI, April 2014
²Source: Nielsen Ad Dynamix
³Source: Nielsen Global Consumer Confidence Survey Q1 2014
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.
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.