Poor Weather Contributes To Worst Supermarket Sales Figures For Two Years

The wet and cool weather from the end of June to early July contributed to the worst year-on-year figures at the UKs leading supermarkets for two years, according to latest data released by Nielsen.

During the four weeks ending 16 July 2016, the value of sales was down 2.4% versus the same period a year ago – the worst figure (excluding an Easter-inflated period) since the four-weeks ending 19 July 2014 (-3.0%). Sales volumes declined 1.5% – the worst figure for nearly two years (13 September 2014, -2.0%).

“The low point was the week ending 2nd July (-5.5% y-o-y) and the weather is having a big impact on the industry at the moment, adding further pressure on sales from deflation and responding to the growth of discounters,” said Mike Watkins, Nielsen’s UK head of retailer and business insight. “With falling spend per visit, supermarkets are becoming more reliant on attracting new shoppers and encouraging loyalty from repeat visits in order to maintain sales momentum. At the moment, big but short-term events such as Euro 2016 and the upcoming Rio Olympics, are not enough to drive topline sales.”

Meanwhile, Nielsen’s data showed that Aldi and Lidl combined to hit a record market share of 11.8% during the 12-week period ending 16 July 2016. Aldi’s sales jumped 18.2% year-on-year, whilst Lidl’s rose 12.3%.

“With many new store openings for the discounters still to come, their share of UK grocery spend is likely to continue rising for the rest of the year,” commented Watkins. “The Big Four are being hit from both sides, with sales at M&S (+5.6%) remaining strong and, like the Co-op (+3.0%) and Waitrose (+2.2%), are also gaining market share at their expense. A common thread across all these retailers is a small store format.”

Looking ahead, Watkins said: “The brief mid-July heatwave will have helped kick-start sales for the supermarkets, however, August is an unpredictable month and, with a deflationary environment, the measure of success for the next few weeks will simply be to keep hold of new shoppers ahead of the ‘back to school’ promotions in September.”