July 20, 2024

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Grocery Sales Growth Slows; Market Share Of Discounters Plateaus

3 min read

Latest data from NIQ shows total till sales growth at supermarkets in the UK slowed to 1.1% in the four weeks to 15 June. This compares to growth of 12.1% in the same period last year and is partly due to wet weather in the early weeks of the month compared to almost four weeks of hot and sunny weather last year. Another contributing factor to the comparison is that food inflation peaked at 14.6% this time last year.

Channel performance also felt the impact of the wet days, as shoppers were more inclined to shop for groceries online rather than in the stores. In the last four weeks, in-store sales were down 0.9%, while online sales increased by 3.7%, boosting the channel’s share of FMCG sales to 12.6%, an increase from 12.2% a year ago. Conversely, convenience store sales were particularly weak, down 5.1%.

With consumers staying indoors to avoid the rain, the NIQ data shows that shoppers reverted to warming foods and treats. Confectionery (+6.7%) and packaged grocery (+6.7%) saw the biggest uplift in category unit sales, followed by meat, fish & poultry (+2.6%), and crisps & snacks (+2.1%), which also saw increases in unit growth. Shoppers also purchased more savoury baking mixes (+29%), gravy & stock (+28%), and ambient soup (+21%).

And with less demand for refreshments against last year’s heatwave, beers, wine and spirits unit sales declined (-8.9%), while soft drinks (-12.5%), tobacco (-12.4%) and general merchandise (-9.9%) also saw a similar decline in unit sales.

Meanwhile, NIQ’s data from the last 12 weeks shows that the market share of the discounters remains at 18%, with sales performance at Lidl (+8%) continuing to outperform Aldi (-1%). However, Aldi had the highest growth of any retailer this time last year. Both retailers are still attracting new shoppers and also more visits, but their average spend per visit is down compared to this time last year.

Ocado (+12.6%) continued to outperform all retailers, while M&S (+7.1%) also gained market share. Sales at Sainsbury’s (+4.7%) and Tesco (+4.1%) also increased, with both gaining market share.

Whilst Morrisons’ market share is down slightly to 8.4%, the retailer saw an 8% increase in FMCG spend per visit over the 12 weeks. Asda (-4.9%) remained the worst performer in the analysis.


Mike Watkins, NIQ’s UK Head of Retailer and Business Insight, commented: “Whilst the growth trends through to mid-June look stark, we can now expect a lower level of growth for a number of months to come as we cycle through high inflation comparatives. We remain hopeful that current warm weather and England’s success at the Euros may boost sales of drinks and snacks.”

He added: “Now that discounter market share has plateaued, their growth for the rest of the year will be more dependent on new store openings and encouraging more visits. This will be needed to counteract some of the spend gained during the high period of inflation, which is now drifting back to supermarkets and may well continue over the next six months.”

“The year-to-date growth at the grocery multiples has slowed to 2.6% in terms of value and 0.8% in terms of unit/volume, and we expect this low growth to continue. This means that the volume trend is now going to be more important than value sales growth as an indicator of the current health of food retail over the next few months.”

NAM Implications:
  • Patently weather and switch to own-label impacted results.
  • But conservatives amongst us will see a lowering of demand…
  • …meaning a company’s growth will come at the expense of rivals…
  • …driven by relative competitive appeal.
  • Meanwhile, the discounters could be reaching saturation…
  • …but for them, the real issue will be whether they can avail of incremental Retail Media revenue…
  • …without a radical change in their business model.


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