Supermarkets in the UK saw a 12.3% uplift in Total Till sales over the four weeks to 20 May, driven by inflation, the Coronation, and the bank holiday weekend. This is an improvement from the 9.7% rise recorded in April, according to the data from NIQ.
Supermarkets (stores over 3,000 sq. ft.) experienced the biggest uplift in sales during the week of the Coronation (+17.6%) as shoppers focussed on celebrating the event and bought extra items, with larger stores able to offer a wider variety of celebratory ranges.
Moreover, NIQ found that over the four-week period, there was a 3.8% increase in shopping occasions – across all channels – with a 4.9% increase in visits to stores, as shoppers continued to shop around for the cheapest prices. Sales in bricks & mortar sales increased by 13.5%. There was also a boost in online sales, which grew by 5.2% – the best growth experienced for the channel since April 2021, with its market share stabilising at 10.9%.
Meanwhile, the data shows that volume sales in supermarkets were better over the four weeks. They were still down 2.6% but have been slowly improving in every month of 2023 since the low point of -6.9% in January.
As a result of the Coronation and bank holiday weekends, the best-performing categories in terms of value sales over the four-week period were bakery (+17.9%), confectionery (+17.9%) and dairy (+16.5%). There was also a lift in discretionary spending, which helped to deliver positive volume sales growth in beers, wines and spirits (+0.7%) and crisps and snacks (+0.6%).
Own-label products continued their strong performance in terms of value sales, with a growth rate of 14.1%, double that of branded lines (+7.1%.) The volume share of own-label products climbed to 63.3% of all FMCG sales in the four weeks, an increase from 62.1% in 2022.
Mike Watkins, NIQ’s UK Head of Retailer and Business Insight, commented: “Inflation has been a significant drag on shopper spend, so this year, incremental sales are reliant on a short-term boost from well-activated events rather than regular promotional activity. With 27% of households saying that they buy extra or special items to celebrate an event or occasion, this will have helped many prioritise spending for the Coronation in early May.”
He concluded: “With warmer weather coming up towards the end of May, we can expect to see a further lift to sales in June, particularly at convenience stores where 30% of households now say they shop at once a week or more. The advantage for retailers is that shopper mobility tends to increase over the summer, and with 82% of consumers buying food on the go, this is another reason to visit a store.
“While some parts of the hospitality industry are facing headwinds, there remains a strong consumer demand for dining at home, and shoppers are indulging themselves through quick grocery delivery and enjoying meals and snacks from a diverse range of rapid delivery platforms like Just Eat, Uber Eats, or Deliveroo. Many shoppers are still looking for a special treat now and again, despite the challenges of inflation.”
NAM Implications:
- The big insight for suppliers is the growth in own-label/brand balance to 63.3%.
- And O/L value sales growing at 2xbrands.
- Changes that may not be easily reversed…
- One way forward for bigger brands is to optimise their use of Retail Media.
- Thus becoming more valuable to retailers in terms of incremental revenue.
- Making them less likely to push their O/L alternatives?
