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Take-home grocery sales rose by just 1% over the four weeks to 9 June 2024, marking the slowest increase since June 2022, as poor weather and falling inflation hit supermarket sales.

According to the latest data from Kantar, the growth slowdown reflects grocery price inflation dropping to 2.1%, after the sixteenth consecutive month of falling inflation.

Overall growth was also hampered by weak footfall, with the average shopper visiting a supermarket 16.3 times this month – down from 16.4 in June last year.

Fraser McKevitt, head of retail and consumer insight at Kantar, commented: “The sixth wettest spring on record hasn’t just dampened our spirits leading into summer, it’s made a mark on the grocery sector too, as it seems Britons are being put off from popping to the shops.

“We’re not yet reaching for those typical summertime products and are making some purchases you wouldn’t expect in June. Consumers bought nearly 25% fewer suncare items this month compared with last year, while prepared salads dipped by 11%. On the other hand, warming fresh soup sales jumped by almost 24%.”

McKevitt added: “The cost of living crisis isn’t over – far from it. Twenty-two per cent of households say they’re struggling, meaning they aren’t able to cover their expenses or are just making ends meet. However, there are positive signs that many of us no longer feel the need to restrict our spending quite so much, with lower inflation helping to ease the pressure on people’s pockets.”

He said supermarkets could see a boost in the current period from the UEFA European Championships currently being played.

McKevitt said: “The grocers are looking to entice in consumers enjoying this year’s tournament, with the proportion of beer and lager sales on promotion leaping up to over 40% in the latest four weeks.

“Retailers will be competing with fans heading out of the house to watch the football as well as with each other. Pubs especially could benefit from a boost – whether or not football comes home. Throughout the last tournament held in 2021, sales of food and non-alcoholic drinks in pubs soared by 60% compared with the average month that year.”

On an individual retailer basis, Ocado was the fastest-growing grocer for the fourth month in a row this period, increasing sales by 10.7% over the 12 weeks to 9 June – ahead of the total online market, which saw sales rise by 4%.

Sainsbury’s was the fastest-growing mainstream grocer, with sales up 4.9% in the period, followed by Tesco at 4.6%.

Asda saw a 4% drop in sales, while Morrisons was up 1.1%.

Lidl was the fastest-growing physical grocer, with sales up 8.1%, while Aldi grew by 0.8% in the period.

Elsewhere, Waitrose was up 3.5% and Iceland by 4.4% (its first growth since March last year), while Co-op fell 2.3%.

Grocery inflation was 2.3% for the longer 12-week period ending 9 June 2024.

Prices are rising fastest in markets such as vitamins, minerals & supplements, chilled fruit juices & drinks, and chocolate confectionery, and are falling fastest in toilet tissues, butter and milk.

Morning update

On the markets this morning, the FTSE 100 is up 0.3% to 8,165.3pts.

Risers include Nichols, up 3.6% to 1,006.5p, Just Eat Takeaway.com, up 1.4% to 1,020.4p and Compass Group, up 1.2% to 2,223p.

Fallers include PayPoint, down 1.5% to 630.7p, Kerry Group, down 1.4% to €75.05 and Deliveroo, down 0.9% to 133.8p.

Yesterday in the City

The FTSE 100 opened the week down 0.1% to 8,142.2pts.

Risers yesterday included PayPoint, up 4.4% to 640p, McBride, up 3.8% to 124.5p, B&M European Value Retail, up 2.5% to 474.5p, WH Smith, up 2.3% to 1,183p, C&C Group, up 2.3% to 157.8p and Bakkavor, up 2.1% to 145p.

The day’s fallers included Nichols, down 3.3% to 972p, Kerry Group, down 2.9% to €76.15, Ocado, down 2.7% to 347.5p, SSP Group, down 2% to 165.2p and Greencore, down 1.5% to 159.6p.

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