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UK supermarket sales remained strong in May, rising 3.3% as shoppers responded to the warmer weather to drive value sales growth to a two-month high.

According to NIQ, total till sales at UK supermarkets were up 3.3% for four weeks ending 18 May 2024, edging down from gains of 3.4% last month.

NIQ said this was largely down to the brief period of hot weather during the week ending 11 May 2024, which pushed value growth at the supermarkets to 5.1%.

However, sales fell back slightly once the rain returned.

NIQ said sales figures were in line with expectations given that supermarkets were competing against exceptionally high comparatives from last year, which included a double bank holiday, the King’s coronation and consistently warmer weather.

In terms of retailer performance over the past 12 weeks, growth was led by Ocado (up 12.4%) but sales were also strong for Sainsbury’s (up 6%) and Tesco (5.4%).

Sales growth at M&S slowed to 7.6% due to last year’s high comparatives, with the discounters Aldi and Lidl also experiencing slowing sales.

While Asda was the only retailer where sales declined compared with last year, there were more visits per shopper to Asda than a year ago and footfall was also helped by the new Asda Express convenience stores.

During the four-week period, overall visits to stores increased by 2.8%, equating to an additional 14.3 million visits compared to last year.

While this led to fewer shoppers using the online channel, those that did shopped more often. This led to the number of online orders increasing 4.1% and the online share of fmcg spend slightly improving to 13.0%.

With more shoppers out and about in the sunshine, this also led to an uplift in fmcg spend in the convenience channel (+3.9%).

Mike Watkins, NIQ’s UK head of retailer and business insight, said: “Over the last four weeks we’ve noticed that it was the warm weather which helped to move the dial in terms of shopper spending at the UK supermarkets, more so than food inflation, which is expected to remain at around 3% for the next few months. Despite this, many shoppers are still faced with limits to their discretionary spend, and this is having an impact on certain categories, so retailers must focus efforts on driving food and drink sales.”

“With weather being such a big factor in driving shopping behaviour, trading over the next few weeks will be challenging as last year marked the hottest June on record. Yet we do have a summer of sport to look forward to with at least 45% of UK households interested in the UEFA Euro 2024 tournament, this should kickstart sales again. Our data shows that of these, 69% plan to watch the matches at home by themselves or with other household members, meaning this could be a boon for supermarket sales of drinks, snacks and food for event-driven categories, such as barbecues.

“Given that we have seen that shoppers were responsive to a week of sunny weather in May, retailers and suppliers will need to remain agile to respond to this with relevant promotions and good availability when summer finally arrives.”

Morning update

Tota UK retail football continued to decline in May as better weather and bank holidays failed to entice shoppers into stores.

According BRC-Sensormatic IQ data for the four weeks to 25 May, total UK footfall decreased by 3.6% in May, albeit an improvement from –7.2% in April.

High street footfall decreased by 2.7% in May (YoY), up from –6.9% in April.

Meanwhile, retail park footfall decreased by 2.3% in May from –6.2% in April and shopping centre footfall decreased by 4.5% during the month from –7.2% in April.

All UK nations saw a fall in footfall year on year, with Scotland the most affected as numbers dropped 5.4% while Wales was down 5%, England by 3.4% and Northern Ireland by 3%.

Helen Dickinson, CEO of the British Retail Consortium, said: “UK footfall declined in May, as bank holidays and improving weather failed to entice customers to make in person trips to shopping destinations. All locations did improve on the previous month while Birmingham performed best out of the major cities, showing a positive footfall trend. Retailers will be hopeful that a warm summer, coupled with events such as the European Championships and Olympics, will boost footfall across all major shopping destinations across the UK.

“With an election only five weeks away, political parties have a role to play too by having policies that mean retailers can invest in rejuvenating shopping destinations across the UK. A broken business rates system and outdated planning laws are holding back the industry – politicians of all stripes must address these issues. This will boost economic growth, lift consumer spirits, and help drive more shoppers back to our high streets and other retail destinations.”

Andy Sumpter, retail consultant EMEA for Sensormatic Solutions, added: “Retailers were dealt some good news in May, as footfall recovered against the month before. While no one’s denying this improvement is starting from a low base following a gloomy performance in April, many will be hoping that this represents a turning point.

“And, with inflationary pressures easing and household budgets starting to feel a little less squeezed, along with the optimism that may come with the general election in July, many may be hoping the mood music has shifted key into something more positive. With lots of opportunities to engage shoppers and benefit from ambient trade from forthcoming major events over the summer, such as the European Football Championships and Olympics, retailers may have just cause for cautious optimism that consumers will vote with their feet and head back to the shops in greater numbers.”

On the markets this morning, the FTSE 100 is up 0.3% to 8,254.9pts.

Risers include PZ Cussons, up 2% to 111.2p, C&C Group, up 1.1% to 171.4p and Greencore, up 1% to 176p.

Fallers include Ocado, down 3.7% to 369.5p, Associated British Foods, down 2.9% to 2,584p and Just Eat Takeaway.com, down 2.1% to 1,016p.

Yesteday in the City

The FTSE 100 returned to growth for the first time in seven sessions yesterday, rising 0.6% to 8,231.1pts.

Risers included Pets at Home, up 7% to 298.4p following its annual results on Wednesday, Virgin Wines, up 6.7% to 48p, Ocado, continuing its volatility up 6.5% to 383.5p, WH Smith, up 6.4% to 1,170p, McBride, up 3% to 121.5p and Greencore, up 2.2% to 174.2p.

Grocery fallers included PZ Cussons, up 4.7% to 109p, Coca-Cola HBC, up 3.4% to 2,640p, Britvic, up 1.1% to 961.5p, Hilton Food Group, up 0.8% to 897p and SSP Group, up 0.5% to 166.5p.

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