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Grocery sales growth slows ahead of Xmas

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Year-on-year value growth of grocery sales has seen a slowdown across the UK’s leading supermarkets in the last month, forcing rivals to increase advertising spend, according to data released today.

Despite a reasonable end to October, aggregate sales growth rose just two per cent across the market over the four weeks to November 10th 2012, down 0.9 per cent on the previous four week period.

According to insights company Nielsen, grocery sales volumes also slowed, rising 0.8 per cent year-on-year compared with the 0.9 per cent growth recorded for the four weeks to October 24th.

As consumer confidence continues to lag, Britain’s top grocers have been affected by news in September that food inflation had hit a two-year low and so launching competitive marketing offensives may be the only way to survive the crucial festive period.

Nielsen’s UK Head of Retailer Insight Mike Watkins said that, during the week to November 3rd, Morrisons spent nearly £320,000 as part of its annual Christmas Coupon Incentive, Waitrose’s £750,000 budget for its TV ad saw it outspend all competitors and Tesco’s TV and print media campaign had a spend of £1.9 million.

While expensive Christmas adverts have long been the preserve of leading supermarkets, fashion and high street retailers have upped the ante in recent years, with department store John Lewis’ seasonal offerings proving particularly popular.

Watkins explained that the fierce competition across the grocery market has seen shoppers favour those offering good value via advertising.

He said: “It’s been a roller-coaster year, so we’ve been forecasting a slow start to Christmas trading.

“With so many money-off coupons available, consumers are already planning where to shop.

“So, looking ahead, differentiated and inspiring advertising which really connects with consumers is expected to play an important role in attracting shoppers in December, particularly for the big Christmas purchasing trips from December 20th to 23rd which could be the biggest four days of sales in food retailing in 2012.”

Published on Thursday 22 November by Editorial Assistant

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