Grocery sales spike as consumer confidence surges

06 March, 2018

The volume of groceries sold at UK supermarkets reached an 18-month high in February and analysts at Nielsen say the outlook is positive for the sector.

Shoppers bought 0.8% more groceries in the four weeks to February 24 than they did in the corresponding period in 2017.

The last time the sector enjoyed such strong year-on-year growth was August 2016.

Mike Watkins, Nielsen’s UK head of retailer insight, said: “In contrast to non-food retailers, which are seeing weaker consumer demand than a year ago, grocery retailing continues to look positive.

“Much of the credit goes to the grocery retailers who’ve displayed a great balancing act at not passing on too much of the increased supply chain costs to the end shopper. As a result, consumers in general don’t feel the need to hold back on grocery shopping.”

Just 27% of sales through the tills were on products with temporary price cuts or multibuy offers, and Nielsen said this is a clear indication of surging consumer confidence.

Watkins said it is a sign that supermarkets “don’t need to go overboard on using promotions to encourage shoppers to spend”.

“In fact, many of February’s promotions across the top four supermarkets, Waitrose and M&S focused more on big nights in, offering customers attractive, but cheaper, alternatives to dining out,” he said.

Over the 12 weeks to February 24, Tesco had the most improved year-on-year performance among the top four supermarkets, with sales up 3.1%, followed by Asda on 2.9%.

Meanwhile Lidl was up 14.8% and Aldi climbed 13% as it creeps ever closer to Morrisons in terms of market share.

Watkins added: “Good news continues for the Big Four: Tesco and Asda are still attracting more shoppers, Morrisons growth was good – even against a good performance last year – and while Sainsbury has the lowest growth, visits and spend per visit are increasing.”

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