Supermarkets on the way back?

Researcher records first two months consecutive growth for two years as drinks sales boom

MULTIPLE grocers in the UK could be emerging from one of their worst periods of sales decline if recent trends identified by some of Britain’s major retail research companies continue.

Researcher Nielsen said the UK’s biggest supermarkets saw increases in both value and volume sales in the eight weeks to 10 September, the first two consecutive months of growth for two years.

For the first time in two years, the UK’s biggest supermarkets, which had seen sales drop as discounters and symbol convenience stores did well, experienced two consecutive months of growth in money taken at the till and volume of goods sold, according to Nielsen retail performance data released last month.

During the four weeks to 10 September 2016, the value of sales was up 0.4% compared to the same period a year ago and sales volumes increased 0.3%.

At the same time the biggest supermarket chain Tesco recorded its best year-on-year performance this year, with sales for the 12 weeks ending 10 September down just 0.2% against the same period last year.

“With both value and volume growth most weeks since the middle of July we’re seeing the green shoots of recovery for the leading supermarkets in their battle against the discounters and price deflation,” said  Mike Watkins, Nielsen’s UK head of retailer and business insight.”

Nielsen said that in the 12-week period the soft drinks category saw sales rise 8.3% year on year, and beers, wines and spirits saw a 6.8% increase.

Kantar Worldpanel figures for the 12 weeks to 11 September showed supermarket sales up 0.3% year on year with particular growth in alcohol sales.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, suggested Team GB’s Olympic success boosted drinks sales, saying: “Sparkling wines including Prosecco and Champagne led the way with growth of 36% as promotional events across a number of retailers successfully tapped into the nation’s celebratory mood.”

Worryingly for the independent and symbol sector Kantar Worldpanel said sales there had continued to slump and were down 6% year on year. As the researcher measures sales of take-home items it may not capture sales in convenience channel  areas of strength, such as items for on-the-go consumption, however.

Both research firms found substantial growth continuing at  Aldi and Lidl, where premium own-label goods did well, as well as at The Cooperative and Iceland.