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Highest UK Supermarkets Sales Growth in Five Years

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Highest UK Supermarkets Sales Growth in Five Years

Highest UK Supermarkets Sales Growth in Five Years
June 28
15:58 2017

The latest grocery market share figures from Kantar Worldpanel, for the 12 weeks ending 18 June 2017, show a marked turnaround for the sector. Supermarket sales growth accelerated to 5.0% – the strongest increase since March 2012 and a stark contrast to the 0.2% decline seen this time last year, despite the political and economic uncertainty of recent weeks.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, comments, “The market’s robust performance this period is partly down to particularly weak sales growth last year and a continuing increase in like-for-like grocery inflation, which is now running at 3.2%. At this rate, that’s an extra £133 on the average household’s annual shopping bill, or the equivalent of seven additional shopping trips a year.

“Butter and fish fans will be feeling price increases most keenly; butter is almost 20% more expensive than last year while farmed salmon supply issues have been among the factors contributing to a 14% price rise across fresh and tinned fish. However, it’s not only inflation which is bolstering market growth. Recent spates of hot weather have given an early boost to traditional summer categories including ice cream and cider, with respective increases of 12% and 16% adding £58 million in sales, and that’s not including the most recent heatwave.”

It’s been another positive period for the individual retailers, several of which are seeing their best growth in years. Tesco sales grew by 3.5%, its fastest rate since April 2012. Fraser McKevitt continues: “Tesco has attracted a further 369,000 shoppers and increased sales across all channels, rising fastest online and through its Extra stores. Despite being in growth for most of the past 12 months its market share now stands at 27.8%, down 0.4 percentage points since June 2016.”

Morrisons achieved the strongest sales performance of the big four grocers. The retailer increased sales by 3.7%, posting growth for the seventh consecutive period despite market share slipping back by 0.2 percentage points to 10.6%. Meanwhile, Sainsbury’s impressive growth online and in its Local convenience stores – particularly in London – helped increase sales by 3.1%.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel.

Asda’s recent recovery continues, as Fraser McKevitt explains: “Asda is the only retailer where branded products are outpacing own label lines – significant for the grocer given it sells a greater proportion of brands than many of its rivals. That isn’t to say Asda’s own label offer is struggling – its Extra Special premium line and recently launched Farm Stores range contributed to a 1.4% increase in private label sales. Overall sales rose by 2.2%, although its market share fell half a percentage point year-on-year to 15.1%.

“Lidl has pipped Aldi to the title of the UK’s fastest growing supermarket for the first time since March, with sales growth of 18.8% just ahead of the latter’s 18.7%. Both retailers continue to gain market share – combined, the two have gained 1.4 percentage points since June 2016 and now hold 5.0% and 6.9% respectively.”

Co-op has now seen continuous growth for a full two years, up 2.2% in the latest period alone. Meanwhile, Iceland, which is up 7.4%, has successfully posted 15 periods of increasing sales. Waitrose had its best sales growth since March 2012, growing marginally ahead of the market at 5.3%, although its share has remained flat at 5.2%.

Amazon’s potential purchase of Whole Foods has brought renewed focus to online shopping, which now accounts for 7.6% of grocery sales and is growing by more than 10% each year. The retail giant will be keen to increase its share of the grocery sector, where it currently holds less than 1% of online sales. Its online rival Ocado now has an overall market share of 1.3%, with sales up 10.7% compared with this time last year.

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