After a mixed bag of summer weather, latest industry data from Nielsen shows the August bank holiday heatwave gave the sector a much needed boost with total supermarket sales up 2.2% in the last four weeks.
During the period, shoppers spent £193m more than they did in the same period last year, with nearly half of this spend at discounters and high street value retailers. Soft drinks sales were boosted by 5.1%, while the frozen foods and beer, wine and spirits categories saw an uplift of 4.1% and 3.3% respectively.
Shoppers also bought more barbeque equipment, sales of which increased by 127%; suncare sales were up 26%, and ice cream up 17%. Shoppers also spent £5.7m more on pre-mixed alcoholic drinks, an increase of 32%.
Despite strong sales for these categories and overall growth, Nielsen highlighted that there were mixed fortunes for retailers over the last 12 weeks. The Big Four supermarkets all saw a drop in market share, whilst the discounters maintained theirs at 16%. Meanwhile, there better news for M&S as recent efforts to improve its food offer helped lift sales.
Mike Watkins, Nielsen’s UK Head of Retailer and Business Insight, said: “Momentum has been hard to sustain over the summer as seen in the 12 week trends, but in the latest four weeks there has been strong performance from the Co-op as well as Sainsbury’s which has attracted over 370,000 new shoppers and is currently the fastest growing top four supermarket. We are also seeing sales improve at M&S with new marketing campaigns designed to attract more frequent visits to their food halls and standalone food stores.”
Watkins concluded: “We anticipate a slow start to the September to December trading period, and don’t expect sales to accelerate until the end of November. For the major supermarkets, there are three challenges ahead: to grow spend per visit faster than the discounters; to encourage shoppers to visit more often for their various shopping occasions, and to roll out inspiring advertising campaigns that will help to build loyalty through to the end of the year, including the crucial month of December. Retailers will also need to make sure that their messages resonate with the increasingly price conscious and Brexit-conscious shoppers.”
12-weekly % share of grocery market spend by retailer and value sales % change
NAM Implications:
- Difficult to accept that the Big 4 are no longer growing…
- …and will gradually lose share (currently 63.6%) to the discounters and other formats, from now on…
- Best for suppliers to optimise alternative formats and banners…
- …both organisationally and economically.
