Sales at the UK’s leading supermarkets declined compared to a year ago for the third consecutive month, according to the latest data from global information and insights company Nielsen.
Since Nielsen first reported the UK grocery market contracting in January 2014, year-on-year sales have declined nine out of the 11 four-week reporting periods.
Sales during the four weeks ending 8 November 2014 were down -0.9% (in value) versus the same period a year ago. Sales volume dropped -1.2%.
“It’s been a bad year for the big four supermarkets and they enter the key Christmas trading period with sales growths much weaker than 12 months ago,” said Mike Watkins, Nielsen’s UK head of retailer and business insight. “Much of this has been put down to the discounters, who are gaining share fast, but it’s the needs and expectations of shoppers that have been changing – and some of the supermarkets simply haven’t adapted quickly enough.”
Nielsen projects that grocery sales for the final quarter of 2014 will be between -0.5% to -1.0%lower than a year ago. For the first time in a decade, Nielsen projects a decline in overall industry sales across a calendar year – from £146bn in 2013 to £145bn.
“The peak period will again be mid-December onwards and, assuming a similar pattern to last year, consumers will be the real winners, by shopping around for the best prices and potentially using a wider range of retailers, store formats and channels than last year,” predicts Watkins. “We expect online grocery sales to continue to grow significantly ahead of other channels and to account for 5% of all sales by the end of the year.”
On the individual supermarkets Watkins said: “Aldi (+21%) and Lidl (+23%) are maintaining their stellar growths and look set for another increase in market share in December, together with Waitrose (+6.9%). For all three, sales growths continue to be driven by new shoppers.”
TV and press spend drops 12%
The leading supermarkets spent £34.6m on TV and press advertising during the four weeks ending 8 November – 12% less than a year ago. Tesco, traditionally one of the biggest investors in advertising, has reduced its spend 61% year-on-year to £2.9m, the fourth lowest total among the top 10.
Watkins comments: “Asda, Aldi and Lidl were the three biggest spenders in the period, being the first to launch their main Christmas campaigns. Despite a 29% decline, Morrisons – who promoted the launch of Match & More and a £25 Christmas Bonus – were the fourth largest spender. The big four are now having to balance spending on media campaigns with the need to make price cuts in store to maintain sales momentum in the run up to Christmas.”