Supermarket sales growth slows to 3.4% as inflation eases
Although food inflation has slowed, food prices remained higher than this time last year, with more shoppers choosing to dine more at home
Total Till sales across UK supermarkets slowed to a growth of 3.4% in the four weeks ending 20 April, down from a growth of 5.4% reported the prior month, according to new data from NIQ.
The slowdown in sales comes as inflation eased in April, with sales also affected by an earlier 2024 Easter and a drop in general merchandise sales (-8%), which, according to NIQ, likely impacted growth.
Although food inflation has slowed, food prices remained higher than this time last year, with more shoppers choosing to dine more at home. Over the last four weeks, meat, fish and poultry (+6.7%) and produce (+6.4%) had the biggest uplifts, alongside dairy (+4.8%).
According to NIQ, over the last 12 weeks sales at Ocado grew by 12%, marking it as the fastest growing retailer. Sales rose by 6.6% at Sainsbury’s and 5.8% at Tesco, as both supermarkets continued to gain market share, with visits to stores increasing against this time last year. Morrisons, which saw growth of 4.4%, is now holding market share with spend per visit growing ahead of last year.
Aldi experienced slow growth in the last 12 weeks however, as sales rose by only 1.3%. Lidl meanwhile welcomed growth of 9.5%.
Mike Watkins, NIQ’s UK Head of Retailer and Business Insight, said: “The early Easter brought forward some spend to March so weekly growths in April were impacted. This in turn exaggerated some of the slowdown in growth which we were already seeing.
“However, the growth week ending 20 April at the major supermarkets was +2.6% and may be indicative of the level of growth now that inflation is in low single digits. We can also expect the gap in growth between private label and brands to close further as shopper spend starts to normalise after 18 months of inflation.”
He added: “Even with lower food inflation and, for some households improving personal finances, shoppers still need to be persuaded to spend. Therefore we can expect promotional activity to continue to increase. With 49% of households now feeling that they are more insulated from the pressure on their personal finances, there is a potential that this cohort will be the first to start to spend more freely in 2024.”
“Shoppers continue to shop around for the best offers. But there is a question mark about spending on fashion, technology and homegoods with holidays and leisure activities more likely to see an uptick when disposable income increases. This means that for food retailers, much depends on the weather improving in the next few weeks to help maintain sales growth as the comparatives are now starting to get a bit tougher.”
