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The Beast from the East fails to freeze grocery sales

04/04/2018

The latest grocery market share figures published today for the 12 weeks to 25 March 2018, show that grocery sales have increased in value by 2.5% compared to this time last year despite adverse weather conditions disrupting shoppers.    

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, comments: “The Beast from the East played havoc with consumers’ usual shopping plans.  In the run up to and during the cold snap, shoppers stockpiled groceries buying 4% more items than normal, increasing the average value of a trip from £14.99 to £15.80.  However, they simultaneously visited stores 5% less often as they stayed wrapped up at home, meaning overall lost sales from the storm were minimised to £22 million.  Warming foods and drinks were the go-to items for customers after braving the snowy weather – sales of hot beverages and tinned soup grew by 8.4% and 27.5% respectively over the past month.”

An earlier Easter this year compared to 2017 motivated consumers into starting their Easter weekend shopping during the month of March.  Fraser McKevitt continues: “Despite average prices jumping by 35p to £1.83, Easter eggs were rolling off the shelf in March with sales up 69% compared to this time last year.  Almost 15 million shoppers picked up Easter eggs last month while the average household, tempted by promotional offers, was swayed into buying at least two Easter eggs to meet their seasonal chocolate fix.  Hot cross buns also saw a steep rise, with sales up £7.7 million compared to this time last year.”

The discounters – Aldi and Lidl – continue to make their mark with both retailers achieving new market share highs.  Growing sales by 10.7%, Aldi increased market share by 0.5 percentage points to reach a 7.3% share of the market, while Lidl clocked in year-on-year sales growth of 10.3% to reach a 5.3% share.  Fraser McKevitt continues: “Aldi and Lidl are continuing to disrupt the market.  As the discounters proceed with the expansion of their store portfolios, over the past 12 weeks 63.5% of all households visited at least one of the retailers.”   

Over the past 12 weeks Tesco experienced a sales increase of 2.4% to hold market share steady at 27.6% – the first time it has held share since December 2016 – attracting an additional 262,000 customers through its doors.  The retailer saw sales growth of branded goods overtake own-label groceries for the first time since June 2015. 

Morrison’s also saw sales increase by 2.4% with a resulting market share of 10.4%.  Growth at the retailer was helped by a strong performance in online sales, with Morrison’s e-commerce offering proving particularly popular among younger, more affluent shoppers.       

Despite encouraging shoppers to up the size of their baskets by 2.4% – the fastest increase experienced amongst the big four – Asda’s market share fell back by 0.2 percentage points to 15.6%.  Sainsbury’s also saw market share drop – down 0.3 percentage points to 15.8% – despite sales growth of 0.6%.  The retailer has continued its move away from promotions: only 32.7% of sales at Sainsbury’s were achieved while a product was on offer. 

Co-op saw sales increase by 0.1%, with the disposal of 300 stores to McColl’s still impacting performance.  Waitrose also experienced sales growth – up 1.5% year-on-year – while its market share fell by 0.1 percentage points to 5.0%.  After two years of continuous growth, Iceland saw sales fall by 0.8% over the past 12 weeks and dropped market share to 2.1%. 

Online sales growth continues to slow, now only increasing by 3.6% compared to this time last year.  Ocado outperformed the overall online market with sales growth of 9.3%, to hold market share at 1.2%.     

An update on inflation

Grocery inflation now stands at +2.5%* for the 12 week period ending 25 March 2018.  Prices have been rising since the 12 weeks to 1 January 2017, following a period of grocery price deflation which ran for 30 consecutive periods from September 2014 to December 2016.  Prices are rising fastest in markets such as butter, fresh fish and fresh pork, fresh lamb, and are falling in only a few markets, including laundry detergents and ambient cooking sauces.

Author

Fraser McKevitt

Head of Retail and Consumer Insight

 

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