Supermarkets fight back, led by Tesco whose recovery continues apace
London, 15 November 2016. Sales growths across the discounters Aldi and Lidl have hit their lowest level in five years, according to Nielsen retail performance data released today.
During the 12 weeks ending 5 November 2016, Aldi’s year-on-year sales revenue increased 11.3% –whilst Lidl’s increased 5.2%. Consequently, the combined figure across the two discounters is the lowest since the end of 2011. However, their current growth still far outstrips the 1.4% rate across the overall UK grocery market.
Between them, Aldi and Lidl account for 11.8% of UK grocery sales, up from 11.1% a year ago.
“It’s inevitable that a time would come when the discounters experienced a slowing growth rate, and three factors have combined to see this happen,” says Mike Watkins, Nielsen’s UK head of retailer and business insight. “Firstly, the growth rates a year ago were particularly high due to a period of new store openings, so it’s always harder to maintain growth against that. Secondly, the supermarkets have had more time to alter strategies to fend off the discounters, particularly Tesco whose recovery continues apace – its 2.3% growth was the strongest in over 3 years.
“Finally, shoppers are still spending freely and we’ve seen a return of sustainable growth in the volume of items people are buying, helped by industry-wide price cuts, so one of the discounters’ USPs is less pronounced in shoppers’ minds.”
On shoppers continuing to spend freely, Watkins notes that this is “despite the so-called Brexit impact, which in reality isn’t expected to “hit” consumer spending until next year.”
Supermarkets fight back
The four weeks ending 5 November was the fourth consecutive month of growth for the UK’s leading supermarkets in both money taken at the till and volume of goods sold.
Revenues were up 1.1% ¹ versus the same period a year ago – the highest figure, excluding Easter-inflated periods, since the end of 2013, whilst volume rose 0.3%¹.
“Driven by Halloween and Bonfire Night, the week-ending 5 November was particularly strong for the major supermarkets, with money taken at the checkout up 2.5% and volumes up 1.9% on last year,” observes Watkins. “This combined with their recent mini-revival over the last 16 weeks suggests this Christmas will see an improvement for the supermarkets over last Christmas when sales were flat. As the festive ad campaigns kick-off, it will be interesting to see how much the supermarkets invest in media spend to support this new momentum. Last year Aldi and Lidl alone spent £27m² to help their sales growth.”
All figures are from Nielsen Homescan Total Till unless otherwise stated
¹Source: Nielsen Scantrack Grocery Multiples
²Source: Nielsen, 12 weeks to 3/1/16, FMCG Press and TV spend
About Nielsen Homescan Total Till
The Nielsen continuous 15,000 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 measures total store sales every week by SKU for 20,000 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 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 £120bn 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 for all devices on which 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 also provides its clients with analytics that help improve performance. Nielsen, an S&P 500 company, has operations in over 100 countries, covering more than 90% of the world’s population. www.nielsen.com.
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