Figures released today by market research firm Kantar show continuing challenges for the UK supermarket sector despite an uptick in consumer confidence since the general election in December.
Supermarket sales increased by just 0.3% last month as shoppers shunned alcohol and meat products thanks to the double whammy of ‘Dry January’ and ‘Veganuary’.
Given that grocery inflation was 1% last month, the volume of items going into consumers' baskets actually fell by over 1%.
As Fraser McKevitt, head of retail and consumer insight at Kantar explained, ‘Many people start the year with good intentions and pledges to make healthier choices following the excesses of the festive period.’
As usual, the best-performing stores were the German discounters Aldi and Lidl who grew their sales by 5.7% and 11.1% respectively as they continue to roll out new stores across the country.
The major supermarket chains, who in most cases have scaled back their new store openings in favour of refurbishing existing stores, all reported lower sales.
The least-worst performer among the ‘Big Four’ was Sainsbury’s (SBRY), which saw sales slip by 0.6%, followed by Tesco (TSCO) which saw sales drop by 0.9%. Bringing up the rear were Asda, owned by Wal-Mart of the US, with a 2.2% slide, and Morrisons (MRW) with a slide of 3%.
On a brighter note, online-only supermarket Ocado (OCDO) edged ahead of the discounters with growth of 11.2%, although in terms of sales it still only accounts for 1.4% of the overall grocery market.
