Shoppers vote to hold back on festive spending

The latest grocery market share figures from Kantar show year-on-year supermarket sales growth slowed again during the past 12 weeks to a modest 0.5%.  Amid the uncertainty of a General Election, a lacklustre Black Friday and a wet autumn, shoppers have been delaying their Christmas preparations and are waiting to stock up on festive supplies.  On average consumers made one fewer visit to the shops over the past three months than this time last year.

Fraser McKevitt, head of retail and consumer insight at Kantar, explains: “We’re yet to see consumers ramp up their spending in the run up to Christmas and, as anticipated, Black Friday only brought a limited boost for the grocers.  The number of people claiming to take advantage of Black Friday* this year fell to 53% from 57% in 2018 with signs of ‘promotion fatigue’ among consumers, an increased scepticism regarding the value of the deals on offer and some retailers pulling back from the day all together.  The event is always less significant in the supermarket calendar and this year only 5% of Black Friday deal hunters bought something from a grocer.”

Fraser McKevitt continues: “With the General Election now only days away, people are waiting to fill their cupboards for the festive break and sales of Christmas puddings and seasonal biscuits are down 16% and 12% in the past four weeks, compared with this time last year.  But there are some purchases that just can’t wait – £28 million was spent on advent calendars in the past four weeks, up 1%, and sales of fresh and frozen party food rose 7% as our diaries fill up with festive events and gatherings.”

Sales growth of 9.3% during the past 12 weeks propelled Lidl to a new record high market share of 6.1%.  Fraser McKevitt comments: “The good news continues for Lidl and 11.9 million shoppers visited one of its stores in the past three months – that’s 652,000 more than this time last year.  Lidl has been encouraging its customers to make bigger shops, running newspaper voucher deals that offer £10 off when the holder spends £40, and larger baskets over the qualifying spend made up 17% of trips in November.”

Meanwhile, Aldi’s year-on-year growth of 6.2% is worth £129 million in additional sales and takes its market share to 8.0%.  The discounter increased sales of its cheapest ‘Everyday Essentials’ range by 29% during the past 12 weeks but also served customers with a bit more money to spend – selling 15% more of its premium ‘Specially Selected’ brand than this time last year.

Co-op achieved growth of 3.6%, with customers spending an extra £12 million in the chilled convenience aisles, on items including pizza, ready meals and cooked meats.  Visitors to the convenience retailer also spent an additional £10 million on fresh fruit, vegetables and salads compared with the same time last year.

The four largest grocers came under further pressure this period with their collective market share dropping to 67.7%, compared with 69.1% this time last year.  Fraser McKevitt comments: “While the big four all lost share in the past 12 weeks, 98% of the British public still visited at least one of their stores during the past three months.  Based on previous years, we expect them to increase their proportion of sales in the coming weeks as shoppers turn to familiar favourites and the traditional retailers in December.”

Tesco was the best performing of the largest grocers over the past 12 weeks though it’s too early to say whether the newly launched Clubcard Plus subscription scheme has had an impact as sales fell by 0.8%.  Sales at Sainsbury’s fell by 1.1% and at Asda by 1.9%, resulting in market shares of 15.7% and 14.6% respectively.  Morrisons’ share of grocery sales dropped back 0.4 percentage points to 10.1% as sales declined by 2.9%.

 

Ocado continued to be the fastest growing grocer, with sales 13.7% higher than this time in 2018.  The online retailer is particularly popular with Londoners and its market share in the capital is now 2.6%, almost double its level of 1.4% nationally. 

Iceland’s growth accelerated to 3.2%, its best performance since November 2018, and its share held steady at 2.2%.  While still declining, Waitrose’s fall in sales of 0.8% means its performance has improved for the fifth month in a row.

*Data from Worldpanel Plus service. 45,203 Shoppix app users were asked ‘Did you grab a bargain over the Black Friday/Cyber Monday period?’.  Questionnaire in field Wednesday 4 to Friday 6 December.

 

Total Till Roll – Consumer Spend

12 Weeks to
2 December 2018

Share

12 Weeks to
1 December 2019

Share

Change

 

£m

%*

£m

%*

%

Total Grocers

27,532

100.0%

27,668

100.0%

0.5%

Total Multiples

27,094

98.4%

27,200

98.3%

0.4%

Tesco

7,602

27.6%

7,543

27.3%

-0.8%

Sainsbury’s

4,405

16.0%

4,357

15.7%

-1.1%

Asda

4,117

15.0%

4,041

14.6%

-1.9%

Morrisons

2,885

10.5%

2,801

10.1%

-2.9%

Aldi

2,089

7.6%

2,218

8.0%

6.2%

Co-op

1,693

6.1%

1,755

6.3%

3.6%

Lidl

1,536

5.6%

1,679

6.1%

9.3%

Waitrose

1,351

4.9%

1,341

4.8%

-0.8%

Iceland

592

2.2%

611

2.2%

3.2%

Ocado

338

1.2%

384

1.4%

13.7%

Other Multiples

484

1.8%

471

1.7%

-2.7%

Symbols & Independents

438

1.6%

468

1.7%

6.8%

*Percentage share of total grocers
 

An update on inflation

 

Grocery inflation now stands at 0.8%† for the 12-week period ending 1 December 2019. 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 fresh sausages, dog food and frozen fish, while falling in fresh poultry, instant coffee and butter.

†This figure is based on over 75,000 identical products compared year-on-year in the proportions purchased by British shoppers and therefore represents the most authoritative figure currently available. It is a ‘pure’ inflation measure in that shopping behaviour is held constant between the two comparison periods – shoppers are likely to achieve a lower personal inflation rate if they trade down or seek out more offers. 

Author: kimbarnard

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