Grocery growth slows as poor weather and falling inflation hit sales

Take-home grocery sales rose by just 1.0 per cent over the four weeks to 9 June 2024, marking the slowest increase since June 2022 as poor weather and falling inflation impacted the sector, according to the latest data from Kantar.

Growth in footfall has also stalled, with the average shopper visiting a supermarket 16.3 times this month – down from 16.4 in June last year.

“The sixth wettest spring on record hasn’t just dampened our spirits leading into summer, it’s made a mark on the grocery sector too as it seems Britons are being put off from popping to the shops,” Fraser McKevitt, head of retail and consumer insight at Kantar, commented.

“We’re not yet reaching for those typical summertime products and are making some purchases you wouldn’t expect in June. Consumers bought nearly 25 per cent fewer suncare items this month compared with last year, while prepared salads dipped by 11 per cent. On the other hand, warming fresh soup sales jumped by almost 24 per cent.”

While it might be contributing to slower market growth, a drop in grocery price inflation is leading to improved consumer sentiment. The rate now stands at 2.1 per cent, marking the sixteenth consecutive month that it has fallen, and 36 per cent of households described their financial position as comfortable in May 2024, a proportion not surpassed since November 2021.

“The cost-of-living crisis isn’t over – far from it,” McKevitt said. “22 per cent of households say they’re struggling, meaning that they aren’t able to cover their expenses or are just making ends meet. However, there are positive signs that many of us no longer feel the need to restrict our spending quite so much, with lower inflation helping to ease the pressure on people’s pockets.”

With the men’s UEFA European Football Championship underway, the supermarkets will be waiting to see if positive performances by England and Scotland can deliver a win at the tills too.

“The grocers are looking to entice in consumers enjoying this year’s tournament, with the proportion of beer and lager sales on promotion leaping up to over 40 per cent in the latest four weeks,” McKevitt added.

“Retailers will be competing with fans heading out of the house to watch the football as well as with each other. Pubs especially could benefit from a boost – whether or not football comes home. Throughout the last tournament held in 2021, sales of food and non-alcoholic drinks in pubs soared by 60 per cent compared with the average month that year.”

Ocado was the fastest growing grocer for the fourth month in a row this period, increasing sales by 10.7 per cent over the 12 weeks to 9 June – ahead of the total online market, which saw sales rise by 4.0 per cent.

Convenience sector, however, saw sales declining in the 12-week period. Sales went down by 4.1 per cent at symbols and independents and 2.3 per cent at Co-op. Asda also experienced a 4 per cent decrease in sales in this period.