Total till sales at UK supermarkets slowed to +8.9% over the past four weeks ending 15 July, down from the +12.4% recorded in June, new data reveals.
The figures from NIQ show this drop in sales is partly due to the unusually high growth experienced the previous month, meaning it is an expected slowdown to growth. However, this is also combined with a slowdown in food inflation and trading against previous high comparatives which included the acceleration of inflation this time last year.
NIQ data shows that volume sales at the grocery multiples also weakened to -3.6%, from -2% a month earlier, as shoppers sought to readjust spending ahead of their summer holidays. This was also aided by the cooler and wetter weather during the week ending 14 July leading to less occasions for shoppers to socialise and spend on additional items. As a result, July was the first time shoppers spent less than a prior period since the seasonal lull in January and last September, which was after the summer heatwaves.
The data shows growth slowed for dairy products (+9.4%) and frozen foods (+7%) amid retailer price cuts. However, there was an increase in sales of confectionery (+16.5%), packaged grocery (+13.4%), and crisps and snacks (+12.8%), with confectionery sales seeing the fastest growth.
Promotional activity is slowly gaining momentum with shoppers, now accounting for 22.5% of grocery sales, up from 20% in the same period last year. This is the highest over the past 12 months except at Christmas and Easter.
Bargain hunting among shoppers has maintained the gap between in-store sales (+9.4%) and online (+4.3%) as shoppers spent £800m more in-store than this time last year.
In addition, the NIQ data shows a growing demand for the value retail chains, like B&M, Home Bargains and Poundland.
Mike Watkins, NIQ’s UK Head of Retailer and Business Insight, said: “Shoppers continue to seek out value by looking for bargains, we’re seeing them become more channel agnostic and less likely to remain loyal to many supermarkets. The value retail channel is becoming a destination for many households for snacks, household, and personal care as well as certain branded packaged grocery items.”
He added: “Over the next eight weeks, we expect to see a similar pattern on spending with little improvement in volume sales as school holidays kick off. The battleground for shopper loyalty is now shifting – retailers must be prepared to build on the trend to shop little and more often when consumers revert to their usual shopping patterns post holidays.”
