The grocery market has fallen into decline for the first time since January, with sales at the tills falling by 0.2% and prices down 1.4%, the latest data from Kantar Worldpanel has revealed.
The impact of the EU referendum was too recent to be reflected in the figures, which cover the 12 weeks to 19 June, but Kantar warned precedent suggested grocery sales were unlikely to see a significant fall.
Overall sales at Tesco dropped 1.3% during the period, while Morrisons recorded a 2.4% decline, both reflecting the ongoing impact of store disposals. Sainsbury’s sales fell 1.4%, and Asda’s woes continued with sales plunging 5.9%. Each of the big four lost market share compared against last year.
Aldi and Lidl reached a combined share high of 10.5%, as 58% of Britons visited either one of the discounters in the past 12 weeks. Co-op achieved a full year of increasing sales, growing 2% in this latest period, while Waitrose’s premium Waitrose 1 range helped it post a run of growth dating back to 2009.
Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “The decline is a continuation of the slow supermarket sector growth dating back to summer 2014, primarily a result of cheaper everyday groceries brought about by a retailer price war.
“While these latest figures predate the EU referendum result, the immediate economic uncertainty is unlikely to cause a substantial fall in grocery volumes, as demonstrated by the 2008 financial crisis when basic food, drinks and household sales proved resilient.
“With an estimated 40% of the food we consume sourced from overseas, any long term change in exchange rates may threaten the current period of cheaper groceries. Historically, higher prices have led to consumers looking for less expensive alternatives such as own-label products, seeking out brands on promotion or visiting cheaper retailers.”
Nielsen data
Nielsen retail performance data, also released this morning, showed UK supermarkets recorded the first “genuine” increase in year-on-year takings at the tills since July 2015, as Euro 2016 boosted alcohol and crisps sales. Nielsen said Brexit was unlikely to change shopper behaviour in the short term.
During the four weeks to 18 June 2016, the sales value was up 0.4% versus the same period a year ago. The last time sales value increased year on year (excluding an Easter-inflated period) was the four-weeks ending 18 July 2015. But sales volume remained flat for the second consecutive period.
“It remains a tough trading environment for the big supermarkets but changes made over the last year in lowering prices, less promotions, edited ranges and improved customer service seem to be having an impact, alongside the drop in shoppers buying cheaper grocery brands to save money,” said Mike Watkins, Nielsen’s UK head of retailer and business insight. “Furthermore, deflation is no longer deepening and, with the effect on figures of some store closures last year soon to be behind us, we can be more optimistic about a supermarket recovery later this year.”
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