UK shoppers are zipping up their wallets and purses and spending less in the grocery sector as they save their cash in anticipation for the next holiday season, the latest data from Nielsen has found.
According to Nielsen, a slowdown in UK grocery sales is now taking place, following a record summer of spending.
New data released by the group reveals that value sales growth has slowed to 1.9% during the last four-week period, ending 6 October. This is compared to 2.4% sales growth in September.
Volume sales at the major supermarkets have also fallen to -0.6%, down from 0% recorded last month.
'The Reset Button'
Mike Watkins, Nielsen’s UK head of retailer insight, said that the beginning of autumn has signalled a disappointing, “though not entirely unexpected”, slowdown in sales.
“Keeping in mind retailers had such a strong summer period, its likely shoppers are pressing the reset button after a season of excess. The warmer weather also potentially has shoppers delaying the need to stock up and hunker down for the colder months,” Watkins said.
“This paired with recent increases in fuel prices and energy bills, which are having an impact on household budgets has meant shoppers are becoming more cautious about their spending.
“It’s likely we won’t see this lull lift until the Christmas promotional period commences in two weeks time, which should give the industry much-needed momentum. With the recent weakened trading, there is a pressing need for retailers to encourage shoppers to get back into the shopping mode after schools break for half-term.”
In the last four weeks, volume sales for own-label products were up 1.7%, whereas branded products were down slightly at -0.3%, further suggesting that shoppers are looking to save money by switching to cheaper alternatives. Retailer promotional activity also remained stable at 26.5% of sales.
“Retailers will look to introduce lower prices in private label across core grocery staples to help drive volume sales - and brands will need to ramp up their promotional activity to counteract it,” Watkins concluded.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Aidan O'Sullivan. Click subscribe to sign up to ESM: European Supermarket Magazine.