Grocery sales hit more than three year high as consumer demand proves robust

The overall grocery market grew by 3.7 per cent in the 12 weeks to 23 April, worth almost £1bn in additional sales to the sector

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The Independent Online

Grocery sales in the UK grew at their fastest rate in more than three years at the beginning of 2017, despite indications that inflation is starting to bite, figures from Kantar Worldpanel show.

The data released Wednesday and based on the spending habits of 30,000 demographically representative households across Britain, shows that the overall grocery market grew by 3.7 per cent in the 12 weeks to 23 April, worth almost £1bn in additional sales to the sector.

For the first time in three and a half years, all 10 of the country’s major retailers are in growth, Kantar Worldpanel said.

Kantar said that although prices are likely to continue to rise as a result of inflation, the current like-for-like grocery inflation rate is still below the average level experienced by shoppers between 2010 and 2014.

The figures showed that Easter was a key driver of growth during the period. Almost three quarters of the population bought at least one Easter egg this year, and total spending on Easter eggs amounted to £325m.

But the number also underscored the lasting trend of cut-price discounters challenging the more established players, especially as shoppers begin to tighten their purse strings.

Morrisons, Asda, Sainsbury, Co-op and Tesco all lost market share, while Aldi and Lidl achieved new record high market shares of 6.9 per cent and 5 per cent respectively. Waitrose’s share was stable.

Separate data published by Nielsen on Wednesday showed that the value of British supermarket sales rose 8.6 per cent in the four weeks ending 22 April, while the volume of goods sold increased by 3.2 per cent.

Mike Watkins, Nielsen’s UK head of retailer and business insight, said that this data also shows the underlying health of the supermarket industry is still “pretty good” despite recent “downbeat” stories about consumer spending in general.

But he also said that, as inflation gains momentum in the coming months, he expects “shopper promiscuity to continue”.

This, he said, will lead to more visits to different stores as shoppers find ways to manage the overall cost of their grocery bill.

"Customer retention is likely to be the next battleground for retailers”.

Last month, figures from the Office for National Statistics showed that overall retail sales slumped 1.8 per cent in March, against City expectations of a 0.2 per cent decline.

Retail sales performed much better than expected in the immediate wake of last June's Brexit vote, helping to boost overall GDP growth and confounding widespread expectations that the economy would fall into recession, but economists are increasingly saying that inflation, stemming from the sharp depreciation of the pound since last June, is starting to bite, especially as wage growth remains chronically weak.

 

Petrol station sales fell 3.1 per cent in March and food store sales by 0.8 per cent.

Volumes in non-food stores declined by 1.3 per cent and in non-specialised stores, including household goods vendors, by 2.4 per cent.

Overall store prices rose 3.3 per cent on the year, according to the ONS, which was the fastest rate of inflation recorded since March 2012.

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