UK Consumers Phasing Out Of Summer Spending Spree
According to Nielsen, UK consumers have returned to their regular shopping behaviours and more usual levels of grocery spend following a bumper summer of spending.
Over the last four weeks ending 8 September, the retail analytics company found that value growth slowed to +2.4% and volume growth for grocery multiples fell back to 0%.
Many shoppers still being on holiday in late August also contributed to a return to normal for industry sales growth, it said.
“This summer was one for the record books: the six-week long heatwave from the end of June to mid-August makes it the joint hottest summer, a title it shares with the summer of 1976 and, more recently, 2003 and 2006,” Mike Watkins, Head of Retail and Business Insight, said.
“The summer brought with it the hot weather and volume growth of 1.4% over the last 12 weeks. The beginning of September and the ‘back to school’ period prompted shoppers to return to usual shopping behaviours and expected levels of grocery spend.”
'A Celebratory Mood'
The summer period accounts for 23% of the UK’s annual grocery sales each year and provides an opportunity to drive additional sales.
Watkins noted that this summer was a particularly strong one due to the hot weather and the World Cup, which got shoppers into a “celebratory mood”.
Over the last 12 weeks, footfall increased by 1.5% on last year, with in-store promotions amounting to 26% of sales. Watkins said that the summer-targeted promotions in categories such as alcoholic and soft drinks accounted for 35% and 28% of sales respectively.
The combination of increased footfall and targeted promotions drove total sales up by 3.8%, and while over half of consumers are worried about their personal finances, 50% still believe that now is a good time to spend.
“This summer presented some clear winners. Over the last 12 weeks, The Co-Op outperformed the other major supermarkets growing by 7.3%, with Iceland close behind at +6.1%. Asda and Morrisons maintained strong performance (at 3.9% and +2.8% respectively), with Tesco growing sales by 2.5%,” Watkins continued.
“When it came to the discounters, Aldi outperformed Lidl over the last 12 weeks, growing 12.5% compared with 9.1%, driven by a bigger increase in average basket spend as well as attracting more new shoppers.”
Shoppers are still maintaining their grocery spend and opting instead to make savings on overall household expenditure, and Nielsen is still “broadly optimistic” about the rest of the year - anticipating FMCG growth to sit close to 3%, with volume growth positive during the fourth quarter.
© 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.