1st Apr 2025 09:28
(Alliance News) - UK grocery sales picked up as supermarkets were mindful of inflationary pressures on shoppers, with promotions playing a large role in spending activity, numbers from Kantar showed on Tuesday.
For the twelve weeks ended March 23, total grocery sales rose 3.2% to GBP34.75 billion from GBP33.67 billion a year prior.
Take-home grocery sales grew 1.8% in the four weeks to March 23 compared to the same period in 2024, the slowest rate of growth since June of last year.
Grocery price inflation picked up to 3.5% over the same period, with Kantar noting that prices are increasing the fastest in markets such as "chocolate confectionery, butters & spreads and chilled smoothies & juices". In the four weeks to February 23, this figure was 3.2%.
Promotional activities played a large role in spending activity in March, with spending on promotions reaching the highest level in the month for four years.
According to Kantar, this made up 28.2% of all grocery sales, with GBP2.6 billion owed to price cuts.
Fraser McKevitt, head of retail and consumer insight at Kantar, said: "With prices continuing to rise, supermarkets are mindful of the need to invest to attract shoppers through their doors.
"Retailers' price cuts were responsible for GBP2.6 billion of promotional spending, 8.8% more than the same time last year and significantly higher than the GBP686 million spent on multibuy deals and 'extra free' offers."
McKevitt continued: "Despite the recent surge, we're still some way off the promotional records hit in the wake of the financial crisis. Average spending on deals in 2012 was 39.8%, meaning there could still be more headroom to go.
"However, the market has changed a lot in that time, with the discounters holding a far higher share today than they did 13 years ago."
Kantar said Britain's largest grocer Tesco PLC increased sales by 5.4% in the 12 weeks to March 23, growing them to GBP9.68 billion from GBP9.18 billion the prior year. Its market share improved to 27.9% from 27.3%, maintaining its dominant industry position.
J Sainsbury PLC also reported market share gains, improving to 15.2% from 15.1% as sales grew 4.1% to GBP5.29 billion from GBP5.08 billion. This marked 35 consecutive periods of year-on-year growth, Kantar said.
Aldi saw its market share hit 11.0% for the first time, as it marks the 35th anniversary of its first UK store opening on April 5. Sales grew 5.6% to GBP3.81 billion from GBP3.61 billion.
Fellow discounter Lidl saw its sales advance 9.1% to GBP2.71 billion from GBP2.48 billion, lifting its market share to 7.8% from 7.4%.
Ocado Group PLC held its position as the fastest-growing grocer, increasing sales by 11% to GBP698 million from GBP628 million. Its market share edged upwards to 2.0% from 1.9%.
Tesco shares were down 2.0% on Tuesday morning in London, while J Sainsbury shares were 3.0% lower. Ocado shares were up 0.3%.
By Christopher Ward, Alliance News reporter
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