The latest figures from Kantar show a fall in supermarket sales as grocery prices reach a new high, with inflation standing at 4.3% in February.
Supermarket sales fell by 3.7% over the 12 weeks to 20th February 2022, however sales remain 8.4% higher than the same period before the pandemic in 2020. According to Kantar, the annual decline reflects last year’s winter lockdown when the public was eating more meals and snacks at home.
“A complex picture”
Fraser McKevitt, head of retail and consumer insight at Kantar, said: “Apart from the start of the pandemic, when we saw grocers cut promotional deals to maintain availability, this is the fastest rate of inflation we’ve recorded since September 2013. Added to this, ongoing supply chain pressures and the potential impact of the conflict in Ukraine are set to continue pushing up prices paid by consumers.”
He added: “In terms of understanding how shoppers are responding, it’s a complex picture for the market this month. Households spent on average £26.07 less at supermarkets in February and own label sales did better than brands for the first time in three months.”
McKevitt noted that the drop in monthly spending isn’t all down to “savvy budgeting”. He argued that the formal end to Covid-19 restrictions in England has led to more people eating on-the-go and eating out. This means that consumers are buying less food and drink to consume at home.
Bargain hunting
Discounters are benefiting from shoppers making more visits to stores. Aldi and Lidl put in strong performances this period and were the fastest growing retailers, both increasing their sales by 3.3%. Aldi attracted an additional 1.3 million customers compared with 2021 while Lidl brought in nearly an extra million.
Change of routine
Further evidence that shoppers are moving beyond the pandemic can be seen in online sales, down by almost 20% year on year over the past month. However, the market-wide drop in online spending failed to dent Ocado’s performance. It bucked the trend to increase its sales by 0.2% over the past 12 weeks. The retailer also grew its market share from 1.7% to 1.8%.
Shopper routines were disrupted by extreme weather in the middle of the month. McKevitt added: “Storms Dudley and Eunice had a noticeable impact on shopper footfall. We recorded nearly 7 million fewer shopping trips during the week ending 20th February compared with our expectations for this time of year. In fact, on the Friday [18th February], there was a 25% drop in footfall compared with the same day in 2021, as many schools, businesses and train links were shut across the country.”
Market breakdown
The majority of bricks and mortar retailers saw take-home grocery sales fall this period compared with last year, though all were in growth against 2020.
Tesco extended its run of market share gains, taking another 0.3 percentage points. It now accounts for 27.7% of the market. Waitrose also grew ahead of its peers to hold its share of the market flat at 5%. Sainsbury’s market share is now 15.5%, Asda 14.6% and Morrisons 9.8%. Co-op holds 5.7% of the market, Iceland 2.3% and independent retailers stand at 1.6%.
