Supermarkets enjoy 3.3% sales boost in May

Total Till sales at UK supermarkets remained strong at +3.3% growth for the four weeks ending 18 May 2024, according to new data released today by NIQ. This is in line with figures reported last month (+3.4%) and is attributed to the brief period of hot weather during the week ending 11 May 2024, which pushed value growths at the supermarkets to +5.1%, a two month high (with the exception of Easter). However, sales did fall slightly once the rain returned. According to the NIQ data, sales figures are in line with expectations given that supermarkets were competing against “exceptionally high” comparatives from last year, which included a double Bank Holiday, the King’s Coronation and consistently warmer weather. Meanwhile, the one week of hot weather helped to lift FMCG volume (unit) growth (+1.8%) at the major supermarkets over the four week period, as UK shoppers splashed out on ice cream (+55%)2, cider (+32%), pre-mixed alcoholic drinks (+28%) and mineral water (+26%) as Brits sought to enjoy the warm sunshine while it lasted. With more time spent outside, sales of suncare (+96%) also soared as did hayfever treatments (+49%). Additionally, during the four week period, visits to stores increased (+2.8%), equating to an additional 14.3m visits compared with last year. NIQ added that while this led to fewer shoppers using the online channel, those that did shopped more often as the number of online orders increased +4.1%. The online share of FMCG spend also slightly improved to 13.0% (up from 12.7% a year ago). In terms of retailer performance over the last 12 weeks, growth was led by Ocado (+12.4%) but sales were also strong for Sainsbury’s (+6.0%) and Tesco (+5.4%). Sales growth at M&S slowed to +7.6% due to last year’s high comparatives, with the discounters Aldi and Lidl also experiencing slowing sales. While Asda was the only retailer where sales declined compared with last year, there were more visits per shopper to Asda than a year ago and footfall was also helped by the new Asda Express convenience stores. Mike Watkins, NIQ’s UK head of Retailer and Business Insight, said: “Over the last four weeks we’ve noticed that it was the warm weather which helped to move the dial in terms of shopper spending at the UK supermarkets, more so than food inflation, which is expected to remain at around 3% for the next few months. “Despite this, many shoppers are still faced with limits to their discretionary spend, and this is having an impact on certain categories, so retailers must focus efforts on driving food and drink sales.” Watkins added: “With weather being such a big factor in driving shopping behaviour, trading over the next few weeks will be challenging as last year marked the hottest June on record. Yet we do have a summer of sport to look forward to with at least 45%3 of UK households interested in the UEFA Euro 2024 tournament, this should kick start sales again. Our data shows that of these, 69% plan to watch the matches at home by themselves or with other household members, meaning this could be a boon for supermarket sales of drinks, snacks and food for event-driven categories, such as barbeques. “Given that we have seen that shoppers were responsive to a week of sunny weather in May, retailers and suppliers will need to remain agile to respond to this with relevant promotions and good availability when summer finally arrives.”