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Grocery sales rose 4.5% in the four weeks to 13 August as inflation drove top-line growth despite falling volumes.
NielsenIQ data reveals that over the four week period, total till grocery sales remained strong, with a growth of 4.5%.
However, this was exceeded by growth of sales at convenience stores, which rose 5.4%. Convenience stores also experienced an uplift in volume sales (+2.7%) compared with volume sales at the grocery multiples, which declined by 3.8%.
According to data from NielsenIQ, 21% of the total sales within convenience stores were on fresh foods where value sales increased by 13%. Sales of frozen foods jumped 29% as did produce (+8%) within this channel.
Shoppers also purchased more as they capitalised on the warm weather, with key category volume growths including ice cubes (+44%), ice cream (+31%) and frozen desserts and cakes (+31%).
Across the whole grocery industry, the summer holidays increased travel opportunities while the summer heatwave that took place in mid-July and early August encouraged shoppers to visit stores more often, leading to an uplift to in-store visits by 8%.
However, the boost to in-store visits came at the expense of online sales, which fell by 8.7% and the online share of FMCG sales fell to 11.3%, down from 11.5% in July and 12.9% share a year ago.
In terms of retailer performance in the last 12 week period ending 13 August, Aldi’s 5% growth saw its share edge up to 10.3%, while Morrisons lost 2.6% to see its share drop to 8.8%.
Aldi is now the fourth retailer in terms of sales, behind Tesco (26.8%), Sainsburys (13.8%) and Asda (12.6%).
Morrisons and Waitrose were the only retailers to experience a sales decline over the 12 weeks. M&S sales were up over 7% and shopper penetration in the last four weeks reached almost 20% of GB households.
Mike Watkins, NielsenIQ’s UK Head of Retailer and Business Insight, said: “It is inflation which is driving topline sales across the industry, but shoppers continue to be very cautious about how much they spend on groceries, resulting in a fall in volume sales at supermarkets.
“However, the hot weather over the last few weeks has helped volumes turn positive at convenience stores, with an increase in purchasing of drinks, frozen and fresh foods in particular.
“The market may have recovered from a low point in March, but we are now seeing the start of ‘peak inflation’ and we anticipate shoppers will need to reign in their spending again after the ‘back to school’ period in a few weeks’ time.
“As inflation continues to bite, retailers that focus on saving shoppers’ money will be the ones that maintain sales momentum and it will those who are most agile and are able to adapt to another change in shopper behaviour that will be able to weather the storm. The battle for loyalty is not going away especially in a time where basket spends are falling and shopper promiscuity is up.”
Morning update
On the markets this morning, the FTSE 100 is down 0.3% to 7,512.1pts.
Risers include Bakkavor, up 5.4% to 99.4p, McBride, up 5.1% to 22.6p and Just Eat Takeaway.com, up 2.5% to 1,646.2p.
Fallers include Naked Wines, down 2.8% to 130.7p, PayPoint, down 2.7% to 621p and Ocaod, down 1.9% to 825p.
Yesterday in the City
The FTSE 100 fell 0.2% to 7,533.7pts yesterday, but there were a number of significant consumer fallers amid warnings over soaring inflation.
Just Eat Takeaway.com lost 9.9% back to 1,606p after Friday’s strong gains on the sale of its stake in Brazil’s iFood.
Other fallers included FeverTree, down 7.5% to 956p, Deliveroo, down 5.9% to 83.8p, Domino’s Pizza Group, down 5.5% to 252.2p, Bakkavor, down 5.3% to 94.3p, C&C Group, down 4.9% to 177.5p, Greencore Group, down 4.6% to 92.6p, Ocado, down 4.1% to 841p and WH Smith, down 4.1% to 1,399.5p.
The few risers included Haleon, up 2.8% to 263.3p, British American Tobacco, up 1.3% to 3,509p, AG Barr, up 0.8% to 535p and Imperial Brands, up 0.6% to 1,922p.
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