Grocery sales spike as consumer confidence surges
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.”