Total till sales at UK supermarkets rose by 4.6% in the four weeks ending 13 June, improving from the 4.2% of the previous period, reveals new data from researchers NielsenIQ (NIQ) - a figure impacted by the start of the World Cup and the hot weather.
At the start of the football tournament, convenience channel sales increased by 1.7% year-on-year. Growth in convenience stores operated by the larger multiples was also higher (+3.6%) compared with a year ago.
The end of May heatwave saw sales growth at the multiples increase too (+6.3%) in the two weeks ending 30 May. However, NIQ’s data reveals that in the following two weeks to 13 June, sales growth slowed sharply (+0.4%), while unit growth fell (-1.7%), as cooler, wetter weather discouraged spending.
Consumer confidence remained unchanged, NIQ added, with shoppers continuing to hold a negative outlook on their personal circumstances.
Additionally, in the same four-week period, promotional activity continued to play a key role in FMCG’s performance, with spend on promotion rising to 25% of total sales, up from 23.5% last year, helped by World Cup-themed promotions.
In the online channel, promotional spend was even higher (29%), as shoppers prioritised value for money and convenience of shop.
Retailers increasingly relied on “promotions, targeted price cuts and own label ranges to sustain demand,” NIQ said, with own label sales growing three times faster than branded sales.
This was further supported by strong performance from premium own label lines, which recorded +9.1% value growth and +6.2% unit growth, the data showed.
Warmer weather also drove strong growth in outdoor and summer-led products, including suncare (+70%), prepared salad (+21% value) and fresh dips (+20% value).
There was also growth in fresh foods (+4.4%), while frozen (+9.4%) became the fastest growing super category, driven by strong performance in ice cream (+34%) and frozen fruit (+28%), with total spend reaching £252m.
As you might expect with a hot World Cup summer, there was also growth in the drinks categories, such as beer, wine and spirits (+2.7%), as well as soft drinks (11.9% value/+5.6% units).
Shoppers also spent £411m on lager, where sales rose (+7.9%), and £111m on cider (+10%). Premix alcoholic drinks (+51%) also saw strong growth. This coincides with the start of the World Cup and warmer weather, encouraging consumers to host viewing parties and social occasions.
The impact of The World Cup was also reflected in the demand for new cuisines and world flavours, with the cooking sauces category showing heightened consumer interest in experimenting with more diverse foods.
Mike Watkins (left), head of retailer and business insight at NIQ, said: “The arrival of hot weather boosted demand for summer essentials, with suncare, ice cream and refreshment related categories among the fastest growing areas of grocery spend.
“As well as outdoor dining occasions, dips and sharing foods as consumers made the most of the early summer weather and retailers adapted ranges to meet this demand.
“The second heatwave of the year will likely see another boost to sales into July…”
“Looking ahead, the second heatwave of the year will likely see another boost to sales into July, conveniently coinciding with the summer of sport. Yet, we still expect lower demand into August when the holiday season disrupts spending.
“The economic outlook for September is still uncertain with increases in mortgage and energy costs expected and the possibility that accelerating food inflation could start to take a bigger share of disposable incomes, which may add further uncertainty for households.
“Retailers and brands will therefore need to continue to find innovative ways to encourage shoppers to spend to maintain the current sales momentum.”
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