Sales growth at British supermarkets picked up in September, reflecting an unseasonal heatwave, industry data showed on Tuesday (19).
Market researcher NIQ said the total value of UK grocery sales rose 10.3 per cent year-on-year in the four weeks to Sept 9, having been up 7.2 per cent in its August report when wet weather held back sales growth.
NIQ highlighted strong sales of meat, fish and poultry as well as salad vegetables. It noted that sales volumes in the week to Sept. 9 were up 2.1 per cent – the first increase since early May, suggesting improved consumer willingness to spend.
The NIQ data going into September provides the most up-to-date snapshot of UK consumer behaviour.
Britain’s consumers have largely defied high inflation and rising borrowing costs to keep up their spending in 2023, but there are signs that the economy is weakening.
Highlighting a polarisation of purchasing power, NIQ said that 44 per cent of UK households were impacted only a little or not at all by the increased cost of living yet 56 per cent of households were moderately or severely affected.
Echoing data from rival market researcher Kantar last week, NIQ said discounters Aldi and Lidl were again the fastest growing grocers over the 12 weeks to Sept 9, with sales up 19.6 per cent and 16.6 per cent respectively, giving a combined market share of 20.2 per cent.
Looking ahead, NIQ forecast total grocery sales growth of around 7 per cent in the fourth quarter and volume growth at food retailers in December.
NIQ UK head of retailer and business insight, Mike Watkins, said, “The warm weather has led consumers to shop more in-store, but online penetration remains unchanged in the last four weeks which has been an underlying trend this year.
“Shoppers are still using this channel but habits have changed. As they visit stores more often, consumers are reducing grocery spending online as they shop around to find the best prices.
“Retailers are keen to pass on price cuts as inflation continues to slow. However, they also need to make sure that messages resonate with price conscious consumers, as for some, their discretionary spending power is still limited.
“The good news is that FMCG volumes are starting to improve against the declines of last year so we expect total till growth to be around 7% in Q4 and volume growth at food retailers in December.”