Sales of general merchandise, such as Halloween items, toys and clothing, fell 4.9% on the year at major UK supermarkets in the four weeks to 4 November, as shoppers preserved their spending power ahead of the festive season, industry data showed.
Market researcher NIQ said total supermarket sales rose 8.7% over the same period, against a backdrop of slowing inflation and an increase in promotional activity – 24% of sales, up from 21% last year.
Sales on a volume basis, or the number of items sold, fell 0.2%, continuing an improving trend after a 0.4% drop in NIQ's October report.
Consumer Behaviour
The NIQ sales data going into November provides the most up-to-date snapshot of UK consumer behaviour.
Echoing data from rival market researcher Kantar last week, NIQ said market leader Tesco, no. 2 Sainsbury's and Marks & Spencer had strong sales growth over the 12 weeks to 4 November, up 9.6%, 10% and 14.4% respectively.
The researcher said discounters Aldi and Lidl continued to grow market share with sales growth of 17.7% and 19.1%, respectively.
Mike Watkins, NIQ’s UK head of retailer and business insight said, "This autumn, shoppers have been carefully managing their grocery budget and making trade offs with other spending which means the supermarkets will need to get shoppers into the mood to spend as we get closer to December.
"Christmas campaigns will be more important than usual as shoppers are looking for smart savings and good reasons to spend. Many shoppers will be holding out for a few more weeks with the hope of not missing out."
Food Price Inflation
According to NIQ, food price inflation in October fell for the sixth month in a row to 8.8%. Food prices rose slightly in month-on-month terms after the first such fall in more than two years in September.
Despite recent macro data and a raft of consumer surveys being downbeat, retailers including Tesco, Sainsbury's, Next, Primark and M&S have all made confident comments about prospects in the so called 'Golden Quarter'.
NIQ estimates that over the 12 weeks to 30 December, UK shoppers will spend more than £37 billion ($45.4 billion) at UK supermarkets, a 6.5% increase on last year.
Watkins added, "All eyes will now be on the top two retailers, Tesco and Sainsbury’s to pull off a strong performance in the weeks ahead. M&S will also be optimistic of significant growth and we also expect the discounters Aldi and Lidl to gain market share this Christmas.
"All five retailers are also expected to drive strong growth in premium food and drink when shoppers finally embrace the festive spirit."
News by Reuters, additional reporting by ESM.
