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January recovery for BWS sales

As a whole, there was no post-Christmas recovery for UK supermarkets however as January sales remained subdued at +0.7% in the last four weeks, according the latest Nielsen data released today.

This figure is significantly less than the same period last year, in which retailers were reveling in 3.3% growth. This year value sales since Christmas fell 0.3% at the grocery multiples, with volumes also down 1%. This was exacerbated by inflation, which was only up by 1.6%1.

The continuing mild winter weather was also not enough to give a seasonal boost, with volume sales of traditional ambient grocery products down 2.8%.

There was however reasonable value growth in soft drinks (2.8%), crisps and snacks (2.6%), and confectionery (2.2%).

The Nielsen data also shows that sales were weak at all of the supermarkets over the last 12 weeks to 25 January, with the only growth coming from Marks & Spencer (0.1%), Iceland (1.1%) and the Co-operative (2.6%).

Discounters Aldi and Lidl also experienced a rise in sales, up 5.6% and 10.8% respectively.

“We know that shoppers are always more conscious of their spending after Christmas, yet this behaviour is impacting the basket more so now than last year. Overall, the number of items purchased per trip is less than last January, resulting in lower supermarket spend - even if visits to stores are up,” said Mike Watkins, Nielsen’s UK head of retailer and business insight.

With ‘little and often’ still the underlying shopping behaviour, and with shoppers less inclined to spend on a big shop, sales at the Co-op and other smaller store formats were more buoyant, he added.

And, he said, although sales had continued to increase at the discounters, growth at Aldi has fallen behind Lidl, and whilst they were both attracting new shoppers and visits to stores on the up, they faced the same pressures as the rest of the industry in maintaining spend per visit.

“The good news is that consumer confidence is improving, compared to where we were six months ago. However, this change in sentiment will take a number of months to be reflected in sales. The economy remains firmly our number one concern, followed by political stability, health and rising utility bills,” he said.”

Assuming there is was no late winter disruption, Nielsen said it anticipated that industry growth would improve to around 1% over the next couple of months, whilst expecting volume growth to remain relatively weak until Easter.