London, 5 June 2015. The volume of items purchased from the UK’s leading supermarkets increased year-on-year for the sixth consecutive month, according to the latest data from global information and insights company Nielsen.
Sales volume increased +0.5%¹ during the four weeks ending 23 May 2015 versus the same period a year ago.
With food price deflation remaining at an all-time low (-0.9%²) for the third consecutive month, the value of sales at the tills during the four-week period fell -0.5%¹ versus the same period a year ago – the eleventh decline in the last 14 months.
The cool and damp weather also influenced sales, as shoppers stocked up on staples such as canned and packet foods, taking advantage of price cuts. Consequently, Packaged Grocery volumes returned to growth (+0.9%) for the first time in nearly a year. Confectionery (+7.6%) and Crisps & Snacks (+4.6%) saw particularly strong growths whilst Bakery, a category with significant price cuts, saw volumes increase +1.9%.
However, when it comes to sales value, deflation continues to depress growths most significantly in fresh food – Meat, Fish & Poultry (-3.2%), Dairy (-2.4%) and Produce (-0.9%) all experiencing declines.
“In a deflationary market, after months of price cutting, lower prices are the norm and less of a factor influencing where consumers choose to shop,” says Mike Watkins, Nielsen’s UK head of retailer and business insight. “Consequently, supermarket growth now relies on attracting new shoppers and driving frequency of visit to build momentum towards the point when inflation eventually returns – probably early in 2016.”
“Morrisons, for example, is currently on the right track. It’s the only one of the Big Four to see a rise in spend per visit over the last four weeks, albeit helped by the anniversary of the start of its price cutting a year ago. Back then, Morrisons was one of the first supermarkets to strategically address the price gap to discounters.”
During the 12 weeks ending 23 May, Tesco (-1.7%) and Asda (-2.6%) were the only two among the 10 biggest supermarkets to see a decline in year-on-year sales.
Sales at Sainsbury and Co-operative were flat, whilst the other six all experienced year-on-year growth – led by the discounters Aldi (20.5%) and Lidl (8.6%).
In the four weeks ending 23 May 2015, Lidl again spent the most on TV and press advertising (£5.1 million³) – 320% more than the same period last year – just ahead of Asda (£4.8 million).
Lidl’s ads focused on quality and its international food range, as well as their low prices for everyday items.
Lidl also had the biggest increase in ad spend, followed by Marks & Spencer (up 131% to £1.8 million).
Watkins concludes: “With consumer confidence at a nine-year high and a growing economy, food retailers’ fortunes should gradually improve, with summer providing a further boost to spending intentions. Modest increases in advertising spend are also expected. However, more than ever, supermarkets need to work harder to ensure their messages cut through and resonate with shoppers, providing reasons beyond just lower prices.”
All figures are from Nielsen Homescan Total Till unless otherwise stated
¹Source: Nielsen Scantrack Grocery Multiples
²Source: BRC-Nielsen SPI May
³Source: 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 £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 £121bn 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. For more information, visit www.nielsen.com.
Meteor Public Relations
Tel: 020 3544 3570
Mob: 0780 313 1144
PR Director, UK & Europe
Tel: 020 3103 3959
Mob: 07770 644136