Warm weather and household buying ahead of summer holidays accelerated sales growth at UK supermarkets in August, although number three giant Asda continued to struggle, industry data showed today (21).
Market researcher NIQ said sales at UK supermarkets grew 5.5 per cent year-on-year over the four weeks to Aug. 10, against growth of 3.6 per cent in last month’s report. This is the largest growth in Total Till sales recorded so far this year, which was aided by a sales boost due to a short heatwave when weekly sales growth week ending Aug 3 hit +6.6 per cent.
Moreover, as Euro 2024 ended, retailers continued to entice shoppers by offering more price cuts and also maintaining promotional spend at 25 per cent of sales purchased. Waning food price inflation also helped, falling to +2.3 per cent.
With a mini heatwave, Soft Drinks were the fastest growing super category at +14.3 per cent. Sales of BWS recovered with value growth of +5.4 per cent.
Ice cream value sales soared +38 per cent as did Mineral Water (+32 per cent) as shoppers sought refreshments. Suncare (+49 per cent) and Hayfever remedies (+42 per cent) also had high value growths with more time being spent outdoors and households buying ahead for summer holidays. And sales of barbecues doubled compared to last year to over £1.2m in the last four weeks .
Echoing data from rival market researcher Kantar last week, NIQ said online grocer Ocado enjoyed the fastest growth over the 12 weeks to Aug 10 with sales up 14.3 per cent, followed by Marks & Spencer with sales increasing 10.7 per cent.
Market leader Tesco, Sainsburys, discounter Lidl and Waitrose also gained market share.
Asda however was the laggard. Its sales fell 6.4 per cent and it lost 1.3 percentage points of market share over the year. Earlier this month, Asda reported a 5.3 per cent fall in second quarter sales and its chairman, veteran retailer Stuart Rose, told the Telegraph that he was “embarrassed” by the group’s performance.
NIQ said last month that food price inflation was running at 2.3 per cent, higher than Kantar’s latest reading of 1.8 per cent. It said the online channel’s share of grocery spend over the four-week period was 12.8 per cent, up from 12.5 per cent this time last year.
Mike Watkins, NIQ’s UK head of retailer and business insight, said, “Retailers will be pleased to have maintained shopper spend beyond Euro 2024, with the warm summer weather adding a boost to sales. However, with almost one in three household’s (29 per cent) top concern still being inflation and shoppers still looking for value, it’s clear that loyalty and membership schemes remain key to encourage spend.
“As summer draws to a close, retailers will be under pressure to maintain sales growth in the next six weeks. This is especially true with the lack of seasonal events and the back-to-school period, as shoppers settle into new routines. We can also expect more comparative price advertising by retailers as they reinforce price credentials ahead of the all-important Q4 sales build.”
Simon Hannah
