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Growth levels hit old heights

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SUPERMARKET growth has hit its highest rate for over three years as consumers show confidence in grocery spending, new figures have suggested.

Spending with confidence: shoppers continue to pick up indulgent items.

The latest UK supermarket statistics from Kantar Worldpanel revealed the overall grocery market grew by 3.7% for the 12 weeks ending 23 April, the fastest rate since September 2013.
And while the big four supermarkets all saw single digit growth, it was again the discounters that put in a storming performance, with Aldi and Lidl value sales up 18.3% and 17.8% respectively.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “All 10 major retailers are in growth for the first time in three-and-a-half years, when we last saw like-for-like grocery inflation as high as it is now.

“While prices do look set to rise further, the current inflation rate of 2.6% is still below the average level experienced by shoppers between 2010 and 2014.”
The impact of rising inflation was also highlighted by Mike Watkins, UK head of retailer and business insight at Nielsen.

Watkins suggested that despite some “rather downbeat” stories about consumer spending, the firm’s grocery data paints a positive picture for the sector.
“Whilst consumers are more likely to be uncertain around spend, we don’t expect a dramatic change in grocery shopping behaviour this year,” he said.

“As long as real incomes don’t come under too much pressure and employment remains high, shoppers will begin to adapt to moderately rising grocery prices, albeit this could be by modifying how much they spend in other retail channels.”

Watkins added that as inflation gains momentum in the coming months, Nielsen expects to see consumers shopping around to manage the cost of their grocery bill.
“Customer retention is likely to be the next battleground for retailers, however this shouldn’t mean a race to the bottom because consumers aren’t solely motivated by the lowest price but also by getting the best value,” he said.

By category, data from Nielsen showed impulse goods, such as crisps and confectionery, experiencing the biggest year-on-year sales rise over last spring, up 7.5%, followed by drinks (6.5%) and fresh foods (3.4%). Watkins noted the rise in “more indulgent” items shows shoppers remain confident when it comes to grocery spending.

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