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Economy

Grocery sales slow to lowest September growth in two years

Shopping momentum has fallen in September, with grocery sales slowing to +1.7% in the last four weeks.

According to new data released by market research data company, Nielsen, this is the lowest growth for UK supermarkets in September in two years.

Before the autumnal weather took hold in early October, sunny weather in the first weeks of September boosted sales in soft drinks (+2.7%), followed by crisps and snacks (+2.3%) and frozen foods (+2.1%).

In contrast, general merchandise sales fell by -4.7%, suggesting a “weakness” in discretionary non-food spend.

In terms of retailer performance over the last 12 weeks, sales at Tesco and Sainsbury’s remained broadly flat, whilst Asda and Morrisons experienced a slight decline. Sales at the discounters Aldi and Lidl continued to grow but at a slower rate than earlier this year.

Nielsen said with the slowdown in recent weeks, UK supermarkets will “need to increase advertising and promotion efforts” to encourage consumers back into shops ahead of the ‘golden quarter’ of seasonal shopping around Christmas and New Year.

Data from Nielsen AdIntel reveals that in the first eight months of the year, Aldi ranked as the top supermarket advertising spender, increasing spend by over 9% to £25.7m. Sainsbury’s has more than doubled spend so far in its anniversary year to £11m. However, advertising spend overall by UK supermarkets has declined by 1%.

Mike Watkins, Nielsen’s UK head of retailer and business insight, said: “With volume sales still in decline at -0.6% in major UK supermarkets, it’s clear that shoppers are continuing to hold back spend.

“Against a backdrop of simmering economic uncertainties and the looming deadline of Brexit, as well as the UK having its lowest food inflation rate since April 20183, retailers are finding it more of a challenge to drive topline sales.”

He added: “Though many retailers are starting to introduce price cuts to help regain momentum after the unpredictable summer, it is evident that retailers will need to invest more heavily in promotional and advertising activity if they want to have the best chance of success in the run up to the seasonal shopping period.

“This should help lift consumer buying momentum and kick start Christmas and seasonal shopping.”

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