Latest NielsenIQ (NIQ) data shows Total Till sales growth in UK supermarkets slowed to 3% during the four weeks to 17th May, down from the 9.6% recorded the previous month, with the discounters winning out as shoppers looked to save money on groceries after treating themselves over the Easter holidays.
Unit sales at the grocery multiples fell 1.4% compared to a year ago across in-store and online formats, with FMCG spend per visit down 4.2% to £18.20. The number of items in the shopping basket also fell compared to last year, indicative of a cautious consumer faced with rising household bills since April.
However, in-store visits were up 7% year-on-year as shoppers took advantage of ongoing retailer promotions. 23% of FMCG sales were on promotion during the period, down only slightly from the five-year high at Easter. The NIQ data also reveals that 41% of households say that loyalty card promotions influence where they choose to shop, which is also helping to drive the increased frequency of visits to stores.
Online sales were relatively weak, with sales down 1.7% and the online share of grocery sales falling slightly to 12.3%. The number of orders continued to increase, but the average size of orders is getting smaller, and the number of households shopping online every four weeks has plateaued this year at 27%.
In terms of category performance, the fastest growing were meat, fish and poultry (value sales +8.4% and unit growth +1.5%), signifying continued shopper habits to prioritise healthier options and home-cooked meals. Warmer weather and sunshine also led to growth in soft drinks (+6.7% and +1.2%), with ice cream value sales up 13% and suncare sales soaring 20%.
In contrast, the weakest categories were packaged groceries, where value sales fell 1.5% and unit sales declined 5.4%. Beer, Wine and Spirits saw value sales slip 2.1% and unit sales fall 3.8%.
“There has been a reset in spending in recent weeks despite the continued good weather, which is indicative of a change in shopper behaviour after Easter, said Mike Watkins, Head of Retailer and Business Insight at NIQ.
“Shoppers are still prepared to indulge but are holding back spending on some categories such as household, pet and also some frozen foods”.
He added: “Consumer confidence improved a little in May, but it is still negative (-20 according to GFK), and shoppers are uncertain about their personal finances. The settled warmer weather gave retailers a boost as shoppers were able to plan more outdoor activities and enjoy alfresco dining, as well as bring forward spending on fresh foods and drinks. However, with shop price inflation in food starting to move up (+2.8% in May, NIQ BRC), we expect Total Till value growth to now remain at around 3% in June.”
NAM Implications:
- Last year’s budget tax rises are now hitting spending.
- With uncertainty causing consumers to seek value/promos…
- …and to shop around.
- And packaging associated costs later this year, yet to impact.
- However, suppliers may be tempted to pin their hopes on the UK weather.
- We are still in, and will continue to have to trade in challenging times…
