World Cup and warm weather boosts UK grocery sales

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Latest grocery market figures from Kantar Worldpanel, published today for the 12 weeks ending 11 July 2010, show a boost in sales for the major retailers despite concerns of a double-dip recession and the approaching government spending cuts.

Grocery market growth reached 4.4% this month, the highest since February, as consumers enjoyed the FIFA World Cup celebrations and basked in the warm weather. Sales were bolstered by aggressive promotions among the major retailers, with a record 34.5% sold on promotion.

Fraser McKevitt, retail analyst for Kantar Worldpanel, said: “Despite England’s dismal performance in the World Cup, people continued to spend in June while they soaked up the sunshine. We’ve seen consumers spending at the fastest rate since Christmas, taking advantage of extremely competitive promotions on traditional summer items such as beer and barbecue foods. On top of that, grocery inflation remains subdued which means shoppers’ money goes a little bit further in their weekly shop.”

Iceland is reaping the rewards of its move into the convenience sector and is now growing by 11.4% over the last year. Low pricing on staple items such as bread and milk have helped raise footfall in the stores. This strong performance places it marginally ahead of Waitrose, which continues to grow strongly and is up 11.3% versus last year. The Co-operative has again recorded the strongest growth this period with a year-on-year growth of 19.3%, lifted by the continued conversion of Somerfield stores.

Among the top four grocers, Morrisons continues to lead the field, posting growth of 6.6%. This is ahead of another strong performance by Sainsbury’s, up 5.3%. Despite increasing sales growth since June and delivering aggressive promotions during the World Cup, both Tesco and Asda lost market share this month.

Independent retailers have also benefited from football fans and consumers enjoying the sunshine with an increase in impulse purchasing. This has helped the sector, which includes operators such as Spar and Costcutter, to grow by 6.9%, the highest level since 2007. However, with overall market share languishing at just 2.3%, the independent sector remains under pressure from the expansion of the multiple retailers.