According to Fraser McKevitt, head of retail and consumer insight at Kantar, overall take-home grocery sales increased by 6.5% over the same period, a slight slowdown compared to last month’s 10.4% growth. McKevitt highlighted that this decline in price rises is the second sharpest monthly fall since the monitoring of grocery inflation began in 2008.
Prices across all supermarket shelves have still risen year on year, but consumers may find relief in the fact that the cost of some staple goods is starting to decrease compared to earlier in 2023. For instance, the price of four pints of milk dropped from £1.69 in March to £1.50 last month, while the average cost of a litre of sunflower oil is now £2.19, reflecting a 22 pence reduction since spring.
In terms of product preference, own-label goods have remained popular, with sales increasing by 9.7% in the latest four-week period. Branded products also saw a rise, albeit a smaller one, of 6.4%. As McKevitt pointed out, while own-label sales continue to outpace branded, the gap between the two is closing. Consumers have been purchasing supermarket lines as part of their efforts to save money, resulting in a restrained weekly grocery spend increase of £5.13 compared to last year.
Unfortunately, hopes for a sunny July were diminished due to unseasonable weather, negatively impacting sales of typical summer favorites. McKevitt acknowledged that the rain played spoilsport for many consumers’ outdoor plans, leading to a significant decrease in ice cream sales (30%) and soft drinks sales (nearly a fifth lower than the previous year). Interestingly, sales of Halloumi, which has gained popularity in recent years during the British summer, were also down by 27%. In contrast, purchases of soup rose by 16% year on year, while roasting joints saw a 5% growth, indicating a shift towards more traditional winter offerings.
The cooler temperatures and wetter conditions may have contributed to a decline in footfall at physical supermarkets for the first time in 18 months, with an estimated 320,000 fewer visits compared to the previous year.
In terms of market performance, Tesco and Sainsbury’s outperformed the industry, experiencing sales growth of 9.5% and 9.3% respectively over the 12 weeks leading up to August 6. Tesco increased its market share year on year to 27.0%, while Sainsbury’s maintained its position at 14.8%. Asda also saw a sales boost of 7.7%, accounting for 13.7% of the market, while Morrisons held an 8.7% share with a 2.3% sales growth compared to the previous year.
Aldi retained its position as the fastest growing retailer for the fourth consecutive month, experiencing a 21.2% sales increase compared to 2022. With a market share of 10.2%, Aldi has seen a rise of 1.1 percentage points year on year. Lidl’s sales also rose significantly by 19.8%, giving the retailer a 7.7% market share.
Waitrose and Co-op witnessed sales growth of 4.4% and 3.4% respectively, resulting in their market shares being 4.4% and 6.1%. Frozen food specialist Iceland experienced a 6.7% sales increase, granting it a 2.3% market share. Online-only retailer Ocado’s market share currently stands at 1.7%, with a 1.4% spending growth. Symbols and independents collectively hold a 1.5% share.
In conclusion, although the growth rate of take-home grocery sales slowed down slightly compared to the previous month, prices have started to ease for some staple goods. Own-label products remain popular, while the preference gap between own-label and branded items is shrinking. Unfavorable weather conditions affected sales of summer favorites, leading to decreased footfall at physical supermarkets. Tesco, Sainsbury’s, and Aldi emerged as strong performers in the market, with Aldi maintaining its reign as the fastest growing retailer.