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'Grocery sales growth slows; Warm weather and Euros to give boost'

'Grocery sales growth slows; Warm weather and Euros to give boost'
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Total till sales growth at supermarkets slowed a bit in four weeks leading to mid of June, primarily due to wet weather, with convenience channel showing particularly weak performance.

According to latest data from NIQ, total till sales growth at supermarkets in the UK slowed to 1.1 per cent in the four weeks to June 15. This compares to growth of 12.1 per cent in the same period last year and is partly due to wet weather in the early weeks of the month compared to almost four weeks of hot and sunny weather last year. Another contributing factor to the comparison is that food inflation peaked at 14.6 per cent this time last year.


Channel performance also felt the impact of the wet days, as shoppers were more inclined to shop for groceries online rather than in the stores. In the last four weeks, in-store sales were down 0.9 per cent, while online sales increased by 3.7 per cent, boosting the channel’s share of FMCG sales to 12.6 per cent, an increase from 12.2 per cent a year ago.

Conversely, convenience store sales were particularly weak, down 5.1 per cent.

With consumers staying indoors to avoid the rain, the NIQ data shows that shoppers reverted to warming foods and treats. Confectionery (+6.7 per cent) and packaged grocery (+6.7 per cent) saw the biggest uplift in category unit sales, followed by meat, fish & poultry (+2.6 per cent), and crisps & snacks (+2.1 per cent), which also saw increases in unit growth. Shoppers also purchased more savoury baking mixes (+29 per cent), gravy & stock (+28 per cent), and ambient soup (+21 per cent).

And with less demand for refreshments against last year’s heatwave, beers, wine and spirits unit sales declined (-8.9v), while soft drinks (-12.5 per cent), tobacco (-12.4 per cent) and general merchandise (-9.9 per cent) also saw a similar decline in unit sales.

Mike Watkins, NIQ’s UK Head of Retailer and Business Insight, commented: “Whilst the growth trends through to mid-June look stark, we can now expect a lower level of growth for a number of months to come as we cycle through high inflation comparatives. We remain hopeful that current warm weather and England’s success at the Euros may boost sales of drinks and snacks.

“Now that discounter market share has plateaued, their growth for the rest of the year will be more dependent on new store openings and encouraging more visits. This will be needed to counteract some of the spend gained during the high period of inflation, which is now drifting back to supermarkets and may well continue over the next six months.”

“The year-to-date growth at the grocery multiples has slowed to 2.6 per cent in terms of value and 0.8 per cent in terms of unit/volume, and we expect this low growth to continue. This means that the volume trend is now going to be more important than value sales growth as an indicator of the current health of food retail over the next few months.”

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