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Price cuts drive sales of butter



Price cuts drive sales of butter

The dairy market maintained a strong growth in the latest 12 weeks to 28th January, down just 0.1ppt to 6.2% year on year. It remains ahead of the total market, total fresh and chilled (which grew at 3.7% and 3.8% respectively) and by a greater margin than last month. It also continues to grow faster than both these markets in volume terms (2.3% vs 0.3% and 1.2%) even though price increases continue to be the key growth driver.

Although milk continues its strong early year performance, the category seeing the biggest improvement in contribution to dairy growth versus last period is butter; contributing £44m in the last 12 weeks, up from £37.7 the previous period.

The only major retailers seeing an increase from dairy this period are Morrisons (an extra £3million), Co-Op (£2.1million), and Iceland (£0.5million). While in butter Morrisons and the Co-Op (both around £2million) are joined by Tesco, Sainsbury’s, and Waitrose (all around £1million).

In net terms, dairy continues to grow solely through non-promoted products, though the rate of decline in sales on promotion continues to ease. Butter, however, does see a big boost in sales on price cut promotions, with full price sales down, as brands (specifically in spreadable butter) drive performance this period.

Finally, while there has been little change to the demographics driving the performance of dairy, however, those households without children and those of lower incomes have contributed to the growth of butter. A reduction in volume deals (which appeal to families) in branded butter in favour of price cuts is driving growth from non-families.


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