Dampened By Dull Weather, UK Grocery Sales Sag

Dampened By Dull Weather, UK Grocery Sales Sag

After a month of strong growth, grocery sales in the UK took a step back in July, due largely to poor weather that dampened the traditional BBQ season.  Sales grew 4 percent in the four weeks ended August 8, 2009 compared to the same period a year ago, according to Nielsen’s monthly survey.  Unit growth was up 2.3 percent.

“The poor weather resulted in shoppers making fewer shopping trips this year.  But with grocers increasing promotional activity, with 33 percent of sales this month being on promotion, we expect monthly growth going forward to be in the 4 to 5 percent range as food inflation continues to slow,” said Mike Watkins, Senior Manager, Retailer Services at Nielsen.

Of the top 9 grocers, Waitrose continued to perform well with double digit growth of 10.5 percent for the quarter and more than 11 percent in the last four weeks.  Asda, Sainsbury’s and Morrisons continue to grow at the expense of smaller retailers, while Tesco has launched a new customer loyalty scheme to intensify the battle for shoppers.

“With shopper promiscuity increasing and loyalty levels falling over the longer term, the added benefits of Tesco’s Club Card 2 may do the trick in keeping Tesco customers loyal to the shop and ultimately spending more of their money there,” said Watkins.

Retailer Share of Market Spend

12 w/e 8/9/08

Share of Market Spend

12 w/e 8/8/09

Value Sales % Change
Tesco 28.3% 28.3% 5.2%
Asda 15.3% 15.7% 8.0%
Sainsbury 14.1% 14.4% 6.9%
Morrisons 10.2% 10.5% 7.8%
Co-op 6.2% 6.2% 5.3%
Waitrose 3.4% 3.6% 10.5%
M&S 3.7% 3.6% 3.1%
Somerfield 3.5% 2.7% -20.8%
Iceland 1.7% 1.8% 6.9%
Source: The Nielsen Company