TOP NEWS: UK supermarket sales fall but inflation heats up - Kantar

Tue, 14th Sep 2021 09:19

(Alliance News) - UK grocery remained above pre-virus levels but have seen an annual slip in recent weeks, with online momentum waning, though Kantar on Tuesday pointed to signs of grocery inflation accelerating.

In the 12 weeks ended September 5, UK grocery sales fell 1.9% annually to GBP29.11 billion from GBP29.68 billion. This was 8.7% higher than two years earlier, before the onset of the pandemic.

"But with people set to return en masse to offices and schools in September, shopping habits are expected to change," Kantar added.

A return to the office could mean that a UK family's "big shop" becomes more muted.

"Supermarket footfall spiked in the first week of September suggesting people made smaller, more frequent trips to top up on groceries," Kantar said.

"The move away from large shops is already evident online â€“ average online baskets are now GBP17 smaller than they were in the first lockdown."

Ocado Group PLC, which frequently made sales and market share strides in past Kantar surveys during the virus outbreak, saw a slowdown this time around. Sales at the online grocer fell 1.5% in the 12-week period to GBP516 million from GBP524 million. Its market share was unchanged at 1.8%.

Among the 'Big Four', Tesco PLC, the UK's largest grocer, was one of just two major supermarket to post sales growth during the period. Tesco sales inched up 0.2% to GBP7.96 billion from GBP7.94 billion. Market share improved to 27.3% from 26.8%.

J Sainsbury PLC's sales, meanwhile, fell 1.6% to GBP4.36 billion from GBP4.43 billion, however its market share rose to 15.0% from 14.9%.

At Asda, sales fell 2.8% to GBP4.18 billion from GBP4.30 billion and market share ebbed to 14.3% from 14.5%.

Wm Morrison Supermarkets PLC saw sales fall by a hefty 4.9%, the worst of the 'Big Four'. Kantar said sales at Morrisons fell to GBP2.86 billion from GBP3.01 billion, with market share falling to 9.8% from 10.1%.

Kantar analyst Fraser McKevitt commented: "Private equity interest in Morrisons has been driven in part because it was the fastest growing of the four major retailers in 2020. But it has fallen back this year because of a tough comparison with the success of 12 months ago. Asda meanwhile is looking at its role in the convenience market and recently announced its intention to launch its new 'On the move' garage forecourt stores. There is huge opportunity in that sector to tap into the 3.7 billion take-home grocery trips of less than GBP20 made every year."

The only other grocer to post sales growth was John Lewis Partnership's Waitrose. Waitrose sales rose 2.2% to GBP1.48 billion from GBP1.44 billion. Its share of the UK grocery market ticked up to 5.1% from 4.9%.

Aldi and Lidl sales declined 0.4% and 0.7%, respectively. The German discounters saw their shares of the market inch higher, however. Aldi's improved to 8.1% from 8.0% and Lidl's rose to 6.1% from 6.0%.

Elsewhere, sales at Iceland fell 3.5% and market share declined to 2.3% from 2.4%, while Co-op sales dropped 5.6% and its share of the market ebbed to 6.5% from 6.8%.

Kantar said grocery inflation now stands at 0.1%. In its previous survey, it reported deflation of 0.8%.

Kantar added: "Prices are starting to increase and people are paying more for their shopping as in-store promotions hit record lows."

In London on Tuesday morning, Sainsbury's shares were 0.4% higher, Morrisons rose marginally, Tesco was up 0.2% but Ocado was 2.5% lower after reporting a third-quarter sales fall at its Marks & Spencer PLC retail joint-venture.

By Eric Cunha; ericcunha@alliancenews.com