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'Slowdown on grocery spent in April, May expected to be better'

'Slowdown on grocery spent in April, May expected to be better'
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Sales growth at UK supermarkets slowed to 3.4 per cent over the four weeks to 20 April, compared to the rise of 5.4 per cent the previous month, shows latest industry report, also adding improving shopper sentiment will drive sales growth in the coming weeks.

According to new data released by NIQ, shoppers took advantage of discounts and promotions in the weeks following Easter, with spending on promotions at 25.3 per cent – up from 24 per cent last month. This was driven by an increase in promotional activity from brands, with value sales of these items up 36 per cent compared to 32 per cent at the same time last year. However, own-label goods (+4.8 per cent ) continued to outpace branded lines (+4.1 per cent ) in sales across all FMCG categories.


The NIQ data also confirms that omnichannel shopping is now engrained in shoppers’ everyday lives, with over a quarter (27 per cent ) of households choosing to buy some groceries online over the four-week period. Online shopping sales rose 3.2 per cent , with the channel’s share of FMCG sales the same as a year ago at 12.6 per cent. There was also an increase in visits to stores (+1.5 per cent ) compared to last year.

NIQ noted that as we head into the May bank holidays and hopefully better weather, there’s a chance that improving shopper sentiment will drive sales growth in the weeks ahead. The research group pointed to its latest Homescan Survey, which shows that fewer consumers (51 per cent) now feel they are moderately/severely impacted by the cost-of-living squeeze than at the end of 2023 (57 per cent).

Commenting on the data, Mike Watkins, NIQ’s UK Head of Retailer and Business Insight, said, “The early Easter brought forward some spend to March, so weekly growths in April were impacted. This in turn, exaggerated some of the slowdown in growth, which we were already seeing. However, the growth week ending 20th April at the major supermarkets was 2.6 per cent and may be indicative of the level of growth now that inflation is in low single digits. We can also expect the gap in growth between private label and brands to close further as shopper spend starts to normalise after 18 months of inflation.”

He added, “Even with lower food inflation and, for some households, improving personal finances, shoppers still need to be persuaded to spend. Therefore, we can expect promotional activity to continue to increase. With 49 per cent of households now feeling that they are more insulated from the pressure on their personal finances, there is a potential that this cohort will be the first to start to spend more freely in 2024.”

Watkins concluded, “Shoppers continue to shop around for the best offers. But there is a question mark about spending on fashion, technology and homegoods, with holidays and leisure activities more likely to see an uptick when disposable income increases. This means that for food retailers, much depends on the weather improving in the next few weeks to help maintain sales growth as the comparatives are now starting to get a bit tougher.”

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