Latest data from Kantar shows take-home sales at the UK’s leading grocers increased by 2.3% over the four weeks to 3 November to reach £11.6bn, making it the biggest sales month of the year so far.
The rise coincided with a jump in the number of shopping trips made by households, hitting a four-year high at 480 million. Fraser McKevitt, head of retail and consumer insight at Kantar, commented: “October 2024 was the busiest month for the supermarkets since March 2020, when people were preparing for the first national lockdown. Trip numbers have been going up gradually for some time, but this steady march hasn’t reached pre-Covid levels of shopping frequency just yet. The average for each household is slightly over four trips per week.”
Halloween played a part in stimulating sales, with confectionery spending hitting £525m in October as sales of chocolates and sweets went up 13% and 7% respectively.
Kantar noted that there were also signs some consumers were starting their Christmas shopping early. “What’s interesting this month is the number of households who are already stocking up the cupboards for the big day in December,” said McKevitt.
“Some people think Christmas ads hit our screens too soon, but it’s clearly important for retailers to set out their stalls early. 648,000 shoppers have already bought a Christmas cake, while 14.4% of households picked up mince pies in October. With Black Friday on the horizon, the grocers will be hoping to capture a slice of the action there too. In the week up to 26 November last year, online and offline sales for typical Black Friday categories across all high street retailers were £1.6bn higher than during an average week in 2023.”
Kantar’s data show that grocery price inflation was 2.3% during the period – a slight rise on September’s 2.0% figure but still within typical levels. The rate has now been below 3.0% every month since the early summer. Promotional activity by the grocers is helping to keep prices down and supporting sales of branded goods in particular. McKevitt commented: “Spending on deals has been going up consistently for the past 18 months, and it now makes up 28.6% of all sales. Offers are helping to lift branded sales especially. The growth gap between brands and own-label is the biggest it’s been since February 2021, sitting at 4.9% and 2.7% apiece. We’ll be keeping a close eye on those numbers to see whether the gap continues to widen in the run-up to Christmas.”
Looking at the performance of individual retailers, Ocado topped the growth table, with its sales increasing 9.5% over the 12 weeks to 3 November. With sales up by 7.4%, Lidl was the fastest-growing bricks & mortar retailer for the 15th period in a row. It secured 326,000 additional shoppers this period, more than any other retailer, and saw particularly strong fresh produce sales growth at 22%.
The UK’s two largest supermarkets also outperformed the wider market. With growth across all its store formats and online, Tesco’s sales rose by 4.6%, taking its share to 27.9% – a gain of 0.6 percentage points on last year. Spending through the tills at Sainsbury’s climbed 4.4%, with its share hitting 15.5% following a rise in both shopper numbers and trips.
It was another disappointing period for Asda, with its market share slipping to 12.5% after a 5.5% fall in sales. Meanwhile, Morrisons continued its gradual recovery, with its sales growth of 2.4% outpacing the market average for the first time since June 2021 and its share holding steady at 8.6%. Despite further store openings, Aldi’s sales growth remained subdued at 1.6%.
NAM Implications:
- Given these cautious times, stocking up in advance might seem a wise precaution to many, especially as there are just six weeks to go.
- With almost 30% of spending on deals, this implies that consumers are willing to shop around…
- Meanwhile, Tesco & Sainsbury’s appear to be growing at the expense of Asda and Morrisons.
- While Aldi has to be focused on restoring their ‘discounter’ growth rate…
- Re-own label vs brands, it could be said that increased advertising spend can help make the size of brand premia tolerable…
- …but at what cost?
