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TOP NEWS: UK Grocery Sales Growth Slows As Pre-Virus Life Resumes

Tue, 15th Sep 2020 09:12

(Alliance News) - Take-home grocery sales in the UK recorded a fifth consecutive period of double-digit growth but sales slowed in August as "some aspects of pre-Covid life resumed", research agency Kantar said Tuesday.

In the 12 weeks to September 6, UK take-home grocery sales grew by 11%, but growth was a more moderate 8.0% in the month of August as consumers returned to their pre-Covid routines and took advantage of the government's Eat Out to Help Out scheme.

Online grocery growth in the most recent four weeks slowed for the second month in a row to 77% as people ventured out more and shielding came to an end for many, Kantar said.

Total UK grocery sales rose 11% to GBP29.67 billion in the 12-week period from GBP26.78 billion a year ago.

Fraser McKevitt, head of retail and consumer insight at Kantar, said: "Grocery growth tailed off in August as the government's Eat Out to Help Out scheme got underway and people were encouraged to return to offices and resume normal routines. Diners' confidence built throughout the month and footfall increased during each week of the scheme, culminating in the final bank holiday Monday when dining out accounted for a two and a half times greater share of consumer spend than the pre-Covid average."

"While online grocery growth is still impressive, it has slowed for the second month in a row and dropped back to 12.5% of total sales this month from a peak of 13.5%. This is not just about people going out to eat in restaurants, August also brought shielding to an end for many vulnerable and at-risk people."

Kantar noted that promotional activity is now back to the highest level since February, and is focused "mainly on straightforward price cuts".

"We expect loyalty schemes to become increasingly important in the months ahead. 26 million British shoppers hold at least one supermarket loyalty card, with the average person carrying three in their wallet," McKevitt said.

For the 12 weeks to September 6, Ocado was the fastest growing retailer, with sales up by 41% year-on-year to GBP515 million. Market share inched higher to 1.7% from 1.4%.

The online retailer, which launched its partnership with Marks & Spencer Group PLC on September 1, separately said the switch to M&S products from those of Waitrose is going well and retail revenue was up 52% in the third quarter to August 30.

Retail sales grew faster compared to the second quarter as demand remained high, Ocado noted, and comes against a "seasonally softer" quarter a year ago.

Waitrose, the former partner of Ocado, increased overall sales by 7.3% year-on-year to GBP1.44 billion in the 12-week period and Waitrose.com experienced the fastest year-on-year online growth of any retailer, Kantar said. Waitrose's market share slipped to 4.9% from 5.0%.

Frozen goods specialist Iceland grew sales by 21% to GBP703 million during the 12 weeks, achieving a 2.4% market share, up from 2.2% last year.

Co-op's market share rose to 6.8% from 6.6% a year before, as sales grew by 13% to GBP2.02 billion.

Kantar said: "Sales at Co-op rose by 13%, but increased by more than double this rate in the North of England, where local lockdowns mean consumers are continuing to shop closer to home."

German discounter Lidl saw 11% growth in UK grocery sales to GBP1.78 billion, and its market share remained flat at 6.0%. Compatriot Aldi had a 10% sales rise in the 12 weeks to GBP2.37 billion. Its market share slipped to 8.0% from 8.1%.

Among the "Big Four" UK grocers, Tesco PLC saw a 11% sales rise to GBP7.94 billion, but its market share remained flat at 26.8%.

J Sainsbury PLC also booked a 8.0% sales jump to GBP4.42 billion. Its market share slipped to 14.9% from 15.3%.

Walmart Inc's Asda had a 6.3% annual sales rise to GBP4.30 billion, but its market share fell to 14.5% from 15.1%.

At Wm Morrison Supermarkets PLC, sales rose 13% year-on-year to GBP3.01 billion, with market share up to 10.1% from 9.9%.

Overall UK grocery price inflation for the 12-week period was 2.3%.

Tesco shares were un-traded in London on Tuesday morning. Sainsbury's was 0.5% lower and Morrisons down 0.4%. Ocado was up 6.0%, the top gainer in the FTSE 100 index.

By Tapan Panchal; tapanpanchal@alliancenews.com

Copyright 2020 Alliance News Limited. All Rights Reserved.

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