The UK dairy market reported a slight improvement in the latest 12-week period, according to figures from Kantar, as it outperformed the wider grocery market and the fresh & chilled market.
For the 12 weeks to 11 August, Kantar found that the overall dairy market grew by 0.7% year-on-year to £2.53bn, with volumes up 1.3% year-on-year. The value growth compares to the 0.6% growth seen in the previous 12-week period. In comparison, the wider grocery market was flat for the period, while the fresh & chilled market was down 0.2%.
The key driver was the performance of cheese, which saw sales grow by 2.3% to £670.8m (volumes + 3.2%), and butter, which saw sales rise by 6.2% to £203.1m (volumes +5%). However, growth was pulled back by flat growth of milk (volumes -0.8%), a 1% decline in yoghurt sales to 382m (volume -3.3%), and a 0.9% decline in sales of margarine to £110.5m (volumes -3.7%).
The mixed results for dairy were also replicated across most of the retailers. Olly Blurring, Client Manager, noted: “Asda (-£4.9m), Morrisons (-£1.2m), Waitrose (-£0.9m) and Aldi (-£2.7m) all see a fall-back in their contribution to growth, whilst Tesco (+£5.4m) and Sainsbury’s (+£3.0m) were the biggest improvers for the sector. In proportion to their size, M&S’s growth of +£1.3m is impressive. However, almost all the retailers have seen an improvement when it comes to cheese”.
The varied performance is evident once again when looking at shopper demographics, with spend from class C2DE (-£2.2m) falling back, and ABC1 shoppers spending more (+£2.6m). Spend from pre-family, young family and those with older dependents is in decline while all other life stages see an improvement. Within cheese specifically, spend is on the rise for all demographics, though spend from families with children aged five to nine is flat.
The cheese sector sees fewer sales on promotion – Y for £X and price reduction mechanisms – with growth coming through full price sales. Looking at the overall dairy market we see full price sales are in decline along with Y for £X promotions, with price cut promotions on the rise.
