Sunday 15 September 2019

UK grocery sales slide for the first time in three years

Slowdown: The UK’s biggest grocers, including Tesco, have faced declining sales. Photo: Reuters
Slowdown: The UK’s biggest grocers, including Tesco, have faced declining sales. Photo: Reuters

James Davey

UK grocery sales fell by 0.5pc in the latest 12-week period, in their first decline since June 2016, industry data showed yesterday, sending shares across the sector lower.

Market researcher Kantar said the sales dip reflected a heatwave a year earlier, which had boosted demand.

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That may spell bad news for Irish food and drink producers, who remain heavily exposed to the UK market.

However, Kantar expects the market to return to growth once the comparative highs of the summer of 2018 pass.

Sales fell year on year at all of Britain’s big four supermarket groups over the 12-week period to July 14, Kantar said.

Sales at market leader Tesco declined 2pc, while at Sainsbury’s, Asda and Morrisons they were down 2.3pc, 2pc and 2.6pc, respectively.

Shares in Tesco, Sainsbury’s and Morrisons were all down in early trading yesterday.

All of the big four lost market share to German-owned discounters Aldi and Lidl.

Aldi’s sales were up 6.7pc and Lidl’s were up 7pc.

“It was a challenging 12 weeks for all the major grocers, with growth slowing at every supermarket except Ocado,” said Fraser McKevitt, head of retail and consumer insight at Kantar.

“Last year, people shopped more frequently and closer to home, as they topped up the cupboards while enjoying the sunshine and the men’s football World Cup,” he said.

“This year, households are making one fewer trip, which may not sound like much but is enough to tip the market into decline.”

Kantar said consumers spent £75m (€83.7m) less on alcohol this year compared to last. Soft drinks sales fell by £56m and ice cream by £55m.

It noted that grocery inflation fell marginally to 0.9pc in the period.

That is good news for consumers but makes it harder for retailers to achieve growth.

Kantar said prices are rising fastest in markets such as crisps, canned fish and fruit squash, while falling in instant coffee, detergents and fresh bacon.

Reuters

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