Latest data from NIQ shows total till sales growth in the UK supermarket sector accelerated to 4.7% during four weeks to 5th October, up from 4.0% in the previous month. This was helped by shoppers starting to look towards seasonal products as retailers rolled out new Halloween and Christmas ranges, resulting in the return to growth of general merchandise (+0.2%) for the first time in 12 months. Overall, FMCG volume growth across the total store was 1.4%.
NIQ noted a continuation of evolving shopper behaviour, with an increase in people embarking on more shopping missions throughout the week, opting for smaller baskets averaging £18.62 in value (4% lower than last year) due to lessening inflation. The latest data shows households shopping for groceries almost five times a week, visiting eight different grocery stores with volumes up 1.1%.
Confectionery led the pack in terms of value growth, jumping 11%, followed by produce (+8.5%), meat, fish and poultry (+5.7%), and health & beauty (+5.4%). Wet weather moderated shoppers’ thirst with weaker performance in beer, wines, spirits (-1.8%) and soft drinks (+0.1%).
In terms of retailer performance over the last 12 weeks, Ocado maintained its status as the UK’s fastest-growing retailer (+15.9%), while M&S clinched second place (+12.4%).
It was a slightly better period for Asda, with its sales falling only 3.1% compared with a 5.5% decline last month. Meanwhile, despite maintaining a significant price advantage over the traditional supermarkets, Aldi’s sales were up only 0.7%.
Commenting on the data, Mike Watkins, NIQ’s UK Head of Retailer and Business Insight, said: “Lower inflation means that the value of the shopping basket is lower than a year ago and even with higher disposable income for some households, shoppers still need a catalyst to spend. We are seeing a return of shopping more often as visits to stores are up, but shoppers are cherry-picking offers at the moment and perhaps planning for bigger shops later in the month around half term. Marks & Spencer attracted 800,000 new shoppers in the last 4 weeks, and over 12 weeks, 1 in 3 households (33%) are now shopping at M&S for food and drink.”
Meanwhile, research by NIQ highlights what shoppers are looking for when choosing where to shop for their Christmas groceries; 49% said low prices, 48% food quality and 47% good stock availability. This suggests affordable prices and premium food and drink might be favourable this Christmas.
Watkins added: “Retailers will be looking to the traditional advertising campaigns in a couple of weeks’ time to really get shoppers into shopping mode as a way to boost weekly sales in the final eight weeks of the Golden Quarter. Shoppers will look to spend more after the half-term holiday and retailers have reasons to be optimistic this Christmas will bring a stronger performance than last. Many households are now budgeting for Christmas and slowly stocking their cupboards to help spread the cost. Where they are less squeezed with more disposable income, they may splash out compared to this time last year.”
NAM Implications:
- ‘households shopping for groceries almost five times a week…
- …visiting eight different grocery stores’.
- This represents a significant reversal in shopping habits.
- Remember ‘the weekly shop’ with people ‘far too busy to shop around’?
- Shoppers are more savvy, and are acting with their feet.
- Ignore at your peril…
