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Total Till grocery sales slowed to -0.7% in the last four weeks ending 9 October 2021, as UK shoppers begin to rebalance their spending habits amid growing concerns around rising energy and fuel costs, according to new data released by NielsenIQ.
During the period, UK shoppers spent £11.8bn on groceries, which is £41m less than the same period last year. However, this is still up +6.6% compared with pre-pandemic shopping two years ago.
In terms of retailer performance over the last 12 weeks, NielsenIQ found that Lidl (12.1%) and Aldi (8.9%) continued to grow sales as consumers opted for more value based options. Tesco (1.9%) and Marks and Spencer (9.4%) were the only retailers to gain market share outside of the discounters.
NielsenIQ also revealed that spend on promotional items remained low at 20%, down from 22% during the same period last year amid growing concerns around availability issues and disruption in the supply chain. It added that UK households are also being encouraged to shop earlier ahead of the festive period – meaning they are not waiting for the start of seasonal promotions.
As well as a rebalancing of basket spend, Nielsen explained that UK consumers are shifting their shopping habits towards an omnichannel experience akin to non-grocery retail shopping behaviours. The data found that shoppers are now moving “fluidly” across digital and physical channels when doing grocery shopping, as both visits to stores (+5.5%) and online shopping trips (+5.3%) increased over the last four weeks.
Mike Watkins, NielsenIQ’s UK head of Retailer and Business Insight, said: “October will be a tipping point for food retail spend. This is down to a plethora of factors, including cautious consumer sentiment, increased concerns about discretionary spend, and ambient food inflation – which accelerated to 0.8%3 in September and also ‘lockdown 2’ comparatives starting in November.
“This is likely to be reflected in top line growth continuing in the region of -1% to +1%. These trends will also give added momentum to value based retailing – with shoppers looking to spend less but still get good value for money.”
He added: “As a result, supermarkets may rely less on broad promotions and instead focus on driving loyalty via smart targeting of discounts and personalised price cuts, such as Tesco Clubcard and Nectar prices and if needed, the return of vouchering.
“Should some shoppers choose to forward purchase seasonal food and drink, for example purchasing one or two extra items on every visit, this may be enough to help keep growth positive. Large out of town stores could also benefit this year should shoppers decide to buy non food such as toys, gifts and homewares.“
