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July supermarket sales saved by Games excitement


Aggregate sales growth across the big four supermarkets saw a 4.1 per cent year-on-year rise in the week preceding the Olympics following “a rather subdued performance during the rest of July,” figures released today reveal.

Although aggregate sales grew just 1.8 per cent while unit sales fell 0.2 per cent over the four weeks ending July 21st 2012, according to global insights firm Nielsen, grocer sales were boosted significantly as anticipation for the event built during the latter part of the month.

Grocery giant Tesco outperformed competitors with a 3.7 per cent jump in gross sales thanks to discount and promotion initiatives such as its ‘Spend £50; get 5p off a litre of fuel’, though this may have a negative impact on growth in the long-term.

Last week, international ratings agency Standard & Poor’s downgraded Tesco’s outlook to negative following a profit decline and warned against using heavy discounting to encourage customers to spend.

Commenting at the time, a statement from the company said: “In our view, market conditions will continue to be extremely competitive, particularly in the U.K., with high pricing pressure throughout the industry.

“We do not exclude a continued decline in adjusted EBITDA margins…owing to the depressed economic conditions in the U.K. and heightened market competition leading to continuing price promotions.”

Competitor Asda saw growth drop to 3.2 per cent over the month as the first anniversary marking its conversion of ex-Netto stores approaches, according to Nielsen’s Senior Manager for Retail Services Mike Watkins.

He added: “The cold and wet weather in early July, combined with the absence of a mid-July major event, resulted in weaker sales growths.

“This was compounded by shoppers remaining fickle and chasing bargains – shopping tactically to benefit from retailer giveaways.

“However, with sales growths improving in the last two weeks of July, due to the warmer weather and the start of the London 2012 Olympics, it’s hoped that the much-awaited turning point of the year has finally been reached.”

Published on Friday 10 August by Editorial Assistant

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