Only exception due to late Easter ‘artificially’ increasing year-on-year figures
Discounters account for £1 in every £11 spent in UK supermarkets
Fresh food is next major battle ground
London – 1 August 2014 – Year-on-year sales growths at the UK’s leading supermarkets declined for the sixth four-week period out of the last seven – and third consecutively – according to the latest data from global information and insights company Nielsen.
During the four weeks ending 19 July 2014 consumers spent -3.0%* less money at the UK’s leading supermarkets than the same period a year ago, buying -3.5%* less volume.
“The grocery sector has been hit by a triple whammy,” says Nielsen’s UK head of retailer and business insight Mike Watkins. “Food inflation has hit a record low of 0.6% while more of people’s shopping is being done at the discounters, which means less money going through the tills, overall. The bad news is compounded with this trading period being unable to compete with the strong sales during last year’s early July heatwave when sales were boosted by +6%.”
The four-week period ending 26 April was the only one out of the last seven periods to buck the trend of year-on-year declining growths – but this included Easter whilst the corresponding period the year before did not.
Between them, Aldi (5.2%) – who have moved ahead of Waitrose – and Lidl (3.8%), now account for 9.0% of UK supermarket sales. The discounters are visited by 14% more people than a year ago.
In the 12 weeks to 19 July, Aldi and Lidl continued to outperform the market with sales increases of 25% and 17%, respectively.
“The next major battle ground is fresh food, a traditional strength of the major food retailers,” comments Watkins. “The discounters have been very effective at stealing share for packaged goods – such as cans, packets and bottles. If they can also eat into fresh foods, which account for almost half of food and drink sales, we could see a seismic shift in the sector over the next six months, particularly as fresh food raises the overall store image, in effect, a double benefit.”
“You wouldn’t bet against it happening. Some of the most resonant price cuts by the leading supermarkets have been in fresh food – dairy, fruit and veg – and Aldi and Lidl have price-matched these.”
The 10 leading supermarkets spent £24.6 million in the four weeks ending 19 July - £6.4 million less than the preceding four-week period, which included the World Cup. However, this was almost 1% more than the same period a year ago.
Sainsbury (up 55% to 2.9 million) and Asda (up 48% to £4.6 million) had the biggest year-on-year increase in spend.
Watkins concludes: “Tesco remained the biggest spender, however, this wasn’t enough to halt its declining share. Sainsbury and Asda upped their hand with strong themes around summer eating, drinks, sport and price comparison. Looking ahead we can expect advertising to focus increasingly on comparative prices as supermarkets target shopper cost-cutting after the summer holidays.”
All figures are from Nielsen Homescan Total Till unless otherwise stated
*Source: Nielsen Scantrack Grocery Multiples
¹Source: Nielsen Ad Dynamix
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.
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. .”