Sales at the UK’s leading supermarkets fell in both value and volume in the four weeks to October 10.
Value sales were down 1% and volume down 0.1% – only the second time in the last 44 weeks that both metrics have declined.
The only good news for the multiples came from the beer category, which grew 6% year on year driven by heavy promotion during the Rugby World Cup. Also up were confectionery – by 3.7% – and crisps/snacks by 1.3%.
“Deflation, discounters and weak volume growths have meant a challenging four weeks for the supermarkets despite the relatively warm weather and the Rugby World Cup,” said Mike Watkins, head of retailer and business insight at Nielsen UK.
“While lower food prices are good news for shoppers, they result in falling spend per visit across the industry which doesn’t benefit retailers who have the same level of fixed and operational costs. ”
The average spend per visit in the latest four-week period dropped 3.3% year-on-year to £17.23.
Both the leading discount retailers, Aldi and Lidl, saw huge growth in the 12 weeks ending October 10. Aldi’s sales were up 27.6% year on year, while sales at Lidl grew 23.3%.
“The other supermarkets will be particularly disappointed that discounter growth shows little sign of slowing,” Watkins said. “Aldi’s year-on-year rise was their highest in nearly 18 months whilst Lidl’s was their highest in nearly a year.”
Among the top four multiples, Sainsbury’s had the best figures with sales flat at 0.0% growth. The other three saw falls of up to 4.2%
“Perhaps, more than ever, the retailers will be looking forward to the start of Christmas promotions in a couple of weeks to turn things around.,” Watkins said.
“We can expect branded price cuts, brand price guarantees and strong promotions, as all the major players search for that important point of difference in consumers’ eyes.