Grocery Sales Boosted By Warm Weather – Kantar

Grocery sales in the UK rose for the latest 12-week period, helped by improved summer weather, according to the latest figures from Kantar Worldpanel.  For the 12 weeks ending 14 August 2016, sales were up 0.3% year-on-year – marking the fastest acceleration for the overall market since March 2016.

The warmer weather helped boost sales of ice cream and ice lolly grew by 23% in the last month, while sales of chilled drinks increased by 10%. At Iceland, ice cream was the fastest growing category, helping it to an overall 4.3% increase in sales on last year. Meanwhile, price cuts such as the ‘7 Day Deals’ and summer loyalty promotions helped bring an additional 129,000 shoppers through Iceland’s doors.

Promotional sales dropped to their lowest level since September 2010, as the major retailers continued shifting towards more simple pricing models.  During the period, only 37.7% of grocery sales were bought on any kind of promotion, down from highs of over 40% in 2015.  Kantar said this reflects the renewed focus on own-label lines, noting that premium retailer brands were up by 9% while value lines were up by 2%.

The report also said there was no evidence that the Brexit uncertainty was causing food prices to rise, as grocery price inflation remained negative (a representative basket of goods was 1.3% cheaper year-on-year).

Kantar Worldpanel -  UK Grocery Market Shares

Lidl was once again the fastest growing supermarket, with sales up 12.2%. The retailer witnessed strongest growth in its key produce, dairy and chilled aisles, increasing its share by 40bps to 4.5%.  Sales at Aldi rose by 10.4%, with share up by 6-bps to 6.2%. The only other retailer to record growth was the Co-op, whose sales rose by 2.8% compared to last year, taking its market share to 6.6% – the highest achieved since 2012.

Tesco’s sales fell by 0.4%, the slowest rate of decline in six months, and Kantar said trends suggest its decline could soon come to an end.  The report said recent product launches have been making a positive impact on its performance, with its ‘Farm brands’ finding their way into over a quarter of the Tesco baskets this period.

Sales declined at Sainsbury’s by 0.6% and fell by 1.8% at Morrisons, giving them a 16.1% and 10.6% market share, respectively. Asda’s decline of 5.5% remains unchanged from the previous month, and its share fell 90bps to 15.7%. Waitrose sales rose by 1.4%, with market share flat at 5.1%.

Kantar also noted that grocery inflation stood at -1.3% for the 12-week period ending 14 August 2016.  This marked the 25th consecutive period of grocery price deflation. Falling prices reflected the impact of Aldi and Lidl and the market’s competitive response, as well as deflation in some major categories, such as bacon, detergents, snacks and butter.