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Britain's Gloomy Weather Dents Supermarket Sales Growth Into August: NIQ

By Reuters
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Britain's Gloomy Weather Dents Supermarket Sales Growth Into August: NIQ

Sales growth at British supermarkets slowed in August, industry data showed, reflecting lower inflation as well as a hit to demand from unsettled, unseasonably wet weather.

Market researcher NIQ said supermarket sales on a value basis grew 7.2% in the four weeks to 12 August – the lowest growth since January and down from 8.9% in its July data set.

The data is the most up-to-date snapshot of UK consumer behaviour.

NIQ said sales on a volume basis fell 3.8%.

Britain's consumers have largely defied high inflation and rising borrowing costs to keep up their spending in 2023, but July's official measure of overall retail sales showed a fall in sales volumes which was widely attributed to rain.

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NIQ said supermarkets, in a bid to encourage demand, edged up spending on promotional activity to 23% of all fast moving consumer goods (FMCG) sales versus 22.5% in the previous month, noting targeted price cuts and loyalty card offers.

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The researcher said market leader Tesco saw sales increase 9.7% over the 12 weeks to 12 August, with its market share nudging up to 26.8%.

NIQ said discounters Aldi and Lidl, with sales up 22.2% and 16.5% respectively, and Marks & Spencer, with sales up 11.5%, were the only other grocers who gained market share in this period.

Last week, M&S upgraded its profit outlook.

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Mike Watkins, NIQ’s UK head of retailer and business insight, said that despite easing inflation, most consumers remain pessimistic about their financial situation in the coming three months, with 60% anticipating that they will be severely or moderately impacted by rising living costs.

"With the added concerns of increasing mortgage and rental expenses for many households, it appears that a shift in sentiment may be some time off," he said.

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