Sales drop to year-lowest despite ramped-up promotions: NIQ

Total till sales in the leading UK supermarkets slowed to 7.2 per cent during the four weeks ending Aug 12- dropping to the lowest level since January- despite retailers ramping up promotional activities to encourage spending.

According to latest figures released by NIQ, drop in sales was due to lower inflation and the unseasonable wet weather over the summer months, with shoppers visiting stores fewer times (-0.5 per cent) in the period compared to last year. Volume sales at the grocery multiples weakened to -3.8 per cent compared to -3.6 per cent in July, with retailers hoping the upcoming bank holiday weekend will provide a boost to the sector.

NIQ noted that retailers further increased spend on promotional activity (23 per cent) compared to the previous month (22.5 per cent) on all FMCG goods in a bid to ease the effects of the cost-of-living crisis and encourage spending.

The trend for bargain hunting continued, with 62 per cent of consumers shopping at discounters in the four-week period and over 780,000 new shoppers at discounters compared to this time last year.

Mike Watkins, NIQ’s UK Head of Retailer and Business Insight, commented: “Recent weeks have seen a decline in supermarket volumes, likely influenced by factors such as summer holidays and unpredictable weather. The rising cost of living also continues to deter people from dining out, with 53 per cent of consumers attributing this decision to increased prices for eating and drinking out.

"The inclement weather has similarly affected non-food retail, as indicated by the recent BRC KPMG retail sales monitor. It’s evident that encouraging consumer spending has become an industry challenge, extending beyond just grocery shopping.”

A recent survey by NIQ showed that despite lower inflation, most consumers remain pessimistic about their financial situation in the coming three months, with 60% anticipating that they will be severely or moderately impacted by rising living costs.

Watkins said: “With the added concerns of increasing mortgage and rental expenses for many households, it appears that a shift in sentiment may be some time off and as a result, while Total Till growth will continue to decelerate as inflation eases, it will still be difficult for retailers and manufacturers to drive FMCG volume growth”.