UK grocery sales bounce back

The late summer and unexpected heatwave in early September helped lift grocery sales at UK supermarkets, with Total Till sales growing +10.3 per cent in the last four weeks ending 9 September 2023, compared with the same period last year, reveals new data released today (19 September) by NIQ (previously known as NielsenIQ).

Data from NIQ shows that growth at the grocery supermarkets during the four week period increased by +7.2 per cent, and peaked at 10.2 per cent in the week ending 9 September, in which the UK experienced a heatwave.

Volume sales during this week also improved to +2.1 per cent for the first time since the first week of May 2023, suggesting improved consumer willingness to spend. Volume sales over the four week period stabilised at -0.7 per cent, but this is up from -3.8 per cent last month.

As temperatures soared, this encouraged Brits to visit stores and loosen their purse strings and purchase more fresh food items. 

Sales grew for fresh produce (value growth of +11.8 per cent with volumes +2.1 per cent), which included seasonal foods such as tomatoes (volumes +1.5 per cent) and lettuce (volumes 3.9 per cent).

Tesco, M&S and discounters grew market share over the 12 weeks

Over the full 12 week period Total Till growths were 8.9 per cent. In terms of retailer performance nearly 1 in 3 households shopped at M&S – almost the same as Co-op – with sales growth (11.8 per cent) helped by the opening of new Foodhalls across the country. Tesco (+9.9 per cent) also gained market share with Sainsbury’s share holding firm (+8.7 per cent) with both retailers using price cuts delivered through Clubcard and Nectar loyalty schemes to drive top line growth as inflation started to slow.

This is in tune with current shopper needs, with data from NIQ’s recent Consumer Outlook Mid-year report showing that the most important saving strategies at the moment are shopping at stores with loyalty points and using loyalty points to manage spend, and opting for private label.

However, it is Aldi (+19.6 per cent) and Lidl (+16.6 per cent) who are outperforming across all shopper metrics with new shoppers, more visits and higher spend per visit contributing to a market share of 20 per cent.

Mike Watkins, NIQ’s UK head of retailer and business insight, said: “The warm weather has led consumers to shop more in-store, but online penetration remains unchanged in the last four weeks which has been an underlying trend this year. Shoppers are still using this channel but habits have changed. As they visit stores more often, consumers are reducing grocery spending online as they shop around to find the best prices. Shoppers go into a store around four times a week but place online grocery orders on average around twice a month.”

Watkins continued: “There are some improvements showing in shopper sentiment as inflation continues to slow and there is now a growth in real incomes. Retailers are keen to pass on price cuts as inflation continues to slow. However, they also need to make sure that messages resonate with price conscious consumers, as for some, their discretionary spending power is still limited.

”We know there is a polarisation of purchasing power with 44 per cent of households impacted only a little or not at all by increased cost of living yet 56 per cent of households are moderately or severely affected, leaving them budgeting carefully. The good news is that FMCG volumes are starting to improve against the declines of last year so we expect Total Till growth to be around 7 per cent in Q4 and volume growth at food retailers in December.”