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Brexit continues to impact supermarket spending

It said sales were up 1.2% in the last four weeks, below the CPI rate of 1.9%, and compared to 2.5% this time last month.

Nielsen said the continued slowdown could be attributed to several factors, including the increased costs of living from rises in energy and fuel prices to the upcoming increase in council tax.

It added the “extended uncertainty” over Brexit appeared to be causing shoppers to tighten their grocery budgets.

“The average household spend each week on groceries amounted to £71, back to the level last seen in October 2017, excluding March 2018, where sales were stronger due to the ‘Beast from the East’ which caused people to stock up, and an early Easter,” said Mike Watkins, Nielsen’s UK head of retailer insight.

“This means that grocery spend remains broadly unchanged in the last 18 months despite inflation. We can see a change in shopping behaviour as well as a shift in sentiment as households shop around to make savings.”

Nielsen said the data revealed shoppers were spending less at the big four supermarkets and switching to discounters Aldi and Lidl, whose combined market share in the last 12 weeks amounted to a high of 16%. In the last 12 weeks, the combined market share of the top four supermarkets was 64.1%, compared with 65.6% last year.

“The last few weeks have continued to be challenging for retailers,” said Watkins. “However, there should be brighter times ahead, with Easter on the horizon bringing attractive seasonal promotions to encourage shoppers to spend more on confectionery, snacks and drinks. If this is accompanied by warm spring weather and more clarity over the status of Brexit, this will help to kick-start growth for the big supermarkets and boost sales in time for summer."