NEWS5 April 2022

Supermarket sales decline amid inflation worries

Covid-19 FMCG News Trends UK

UK – Total sales at UK supermarkets fell 4.1% in March as inflation and cost of living concerns continue to grow, according to data from NielsenIQ.

person shopping in supermarket with a basket

The findings, which are based on Homescan Total Till data covering 14,550 British households in the four weeks to 26th March, showed sales growth was at its lowest level in 2022.

However, NielsenIQ said the data was contrasted with relatively high lockdown comparatives from early 2021 and said that there were indications of a return to growth post-Easter and into the spring.

Shoppers have also been shifting to private label products in supermarkets as cost of living concerns bite, with an increase of 3.3% in the ambient grocery category and a rise in share of total sales for private label fast-moving consumer goods from 52.4% to 53.2% over the past year.

Beers, wines and spirits (-17.6%) and confectionery (-21.9%) experienced the steepest declines in sales against last year, although this could reflect Easter being two weeks earlier last year, NielsenIQ said.

Meanwhile, pet food and pet care (+12.7%) and health and beauty (+11.8%) experienced the fastest growth.

In the last 12 weeks, Marks & Spencer (+9.4%) experienced the fastest growth, followed by Lidl (+8.6%) and Aldi (+5.6%). Those three supermarket chains were the only retailers to gain market share.

Online supermarket sales dropped 19% compared with the same period in 2021, while sales at physical stores declined 0.6%.

Last year, online sales had risen 92% on the previous year and NielsenIQ said the figures showed a continued normalisation in post-pandemic shopping behaviours.

Store visits rose 5% in March, NielsenIQ said, with online sales accounting for 12.4% of supermarket sales.

Spend per visit was unchanged at £18.52 in March, while promotional spend on offers also remained unchanged at 20% of sales.
Mike Watkins, UK head of retailer and business insight at NielsenIQ, said: “As we leave behind the pandemic, it’s clear that shoppers are re-evaluating what they spend.

“While some of the changes in grocery spend will be due to consumers simply having a different basket mix compared with last year, our data also shows that consumers are now increasingly shopping for private label products as part of their coping strategy.”