Supermarket sales rise to highest level in 18 months

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The volume of groceries sold at the UK supermarkets rose by its highest year-on-year rate for 18 months in the four weeks ending 24 Feburary, according to new data from Nielsen.

Shoppers bought 0.8% more groceries during the four-week period compared to the same period last year. The increase is the highest year-on-year growth – excluding seasonally-affected periods – since August 2016.

However, while volume sales improved, the amount shoppers spent decreased slightly on recent figures. 

Year-on-year sales at supermarkets increased by 1.8%, or 2.9% when including the discounters. Figures in the previous four-week period were 2.7% and 4.2% respectively, with the fall due in part to peaking inflation.

Nielsen’s UK head of retailer insight Mike Watkins said: “In contrast to non-food retailers, which are seeing weaker consumer demand than a year ago, grocery retailing continues to look positive.

“Much of the credit goes to the grocery retailers who’ve displayed a great balancing act at not passing on too much of the increased supply chain costs to the end shopper. As a result, consumers in general don’t feel the need to hold back on grocery shopping.”

Furthermore, the amount shoppers spent on products with temporary price cuts or multi-buy offers remained relatively low during the four weeks ending February 24, at 27% of all sales.

Watkins said this was a sign that supermarkets “don’t need to go overboard on using promotions to encourage shoppers to spend”.

During the 12 weeks ending February 24, Tesco had the most improved year-on-year performance among the top four supermarkets (+ 3.1%), followed by Asda (+ 2.9%). The Co-operative Group saw sales increase by 1.4% over the same period. 

Watkins added: “Things suggest that the strategy of the major supermarkets to target improving like-for-like sales, being less reliant on new stores for growth and reducing operating costs to help invest in lower prices, could be the green shoots of a sustainable recovery.” 

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