Consumers continue to stock up as supermarket prices tumble, Nielsen reports

The volume of items purchased from the UK’s leading supermarkets increased year-on-year for the fifth consecutive month, according to the latest data from global information and insights company Nielsen.

Sales volume increased +0.4% during the four weeks ending 25 April 2015 versus the same period a year ago.

Food prices fell for the fourth consecutive month, with food deflation remaining at an all-time low (-0.9%) in April. Consequently, sales value during the four-week period fell -1.2% versus the same period a year ago.

“Food deflation and falling spend-per-visit are the biggest challenges facing UK supermarkets,” says Mike Watkins, Nielsen’s UK head of retailer and business insight. “Although retailer price wars are contributing to sustainable growth in the amount people buy, price is still less of a differentiator for building loyalty to a supermarket, than the overall store and shopper experience.

“Promotions  which have increased to 34% of sales  continue to be used to drive incremental spend. But retailers will need to work much harder at communicating why shoppers should choose them, beyond just price. Lidl, for example – currently the biggest spender on advertising of the supermarkets – is now focusing more on its quality and fresh food messaging than simply low prices.” 

Sainsbury’s is big four’s best performer
During the 12 weeks ending 25 April, Sainsbury’s saw the smallest decline in year-on-year sales among the “Big Four” (-0.1%) while Asda had the largest (-2.5%). 

Aldi’s sales grew 19.6% year-on-year, and Lidl’s, 7.1%. Their combined market share hit 11% – more than twice that in the same period two years ago (4.9%).

Marks & Spencer (3.6%), Waitrose (1.7%) and Iceland (0.9%) were the only other supermarkets to see a year-on-year increase in sales. 

Supermarket share and sales

Lidl biggest spender on TV and Press advertising for second consecutive month
In the four weeks ending 25 April 2015, Lidl again spent the most on TV and press advertising (£5.2m) – 31% more than the same period last year – just ahead of Tesco (£4.5m).

Iceland again increased spend the most – up 102% to £0.6m – followed by Marks & Spencer (up 76% to £2.3m).

Watkins said: “If deflation continues, we anticipate volumes increasing over the summer as people channel savings made into affordable indulgences from the supermarket, not just on food consumed out of the home.”