8th Mar 2016 11:52
LONDON (Alliance News) - J Sainsbury PLC again emerged unscathed in the latest Kantar Worldpanel grocery sales data on Tuesday, as the other big four supermarkets all saw sales fall, and Asda Ltd and Wm Morrison Supermarkets PLC took particularly heavy hits.
Total UK grocery sales for the 12 weeks to February 28 grew by 0.5% year-on-year, although they fell by 2.0% in larger stores as consumers spend less per average trip in these shop formats, according to Fraser KcKevitt, head of retail and consumer insight at Kantar.
As has been the case in recent months, Sainsbury's bucked the trend of its rival big four supermarkets as its sales rose 0.5% in the period, boosted by strong online sales and its Sainsbury's Local convenience stores.
This marks the eighth consecutive period of sales growth for the company, and the longest run of sales growth for any of the four main grocery retailers since March 2013. Sainsbury's market share also held firm at 16.8%, flat from a year earlier.
Tesco, meanwhile, saw its sales fall by 0.8%, although this did halve on last month's decline of 1.6%. McKevitt said a renewed focus on price promotions has helped stem the flow of shoppers leaving the retailer, despite the closure of around 50 stores last year. Tesco's market share dipped to 28.4% from 28.7%.
Worse performances, however, were turned in by Asda, owned by US giant Wal-Mart Stores Inc, and Morrisons, which will rejoin its rivals in the FTSE 100 later this month having fallen out of the blue-chip index in 2015.
Asda sales slumped by 4.0% in the 12-week period year-on-year, while its market share shrank to 16.2% from 17.0%. McKevitt said Asda was disproportionately hit by the sales decline in bigger stores as the retailer famously trades from very large stores, only opening its first two convenience stores in London last year.
The picture was not much brighter for Morrisons, where sales fell by 3.2% year-on-year and its market share fell to 10.6% from 11.0%. McKevitt noted that while online sales are growing strongly for the retailer, sales are still falling as it operates fewer stores than last year.
The challenge of discounters, Aldi and Lidl, continued apace. Aldi sales rose by 15% in the period, while Lidl sales increased by 19%. The combined market share of the German pair is at 10.0% of the total market, up from 9.8% in the previous month's Kantar report.
Upmarket grocer Waitrose also saw sales edge higher, up 0.2% year-on-year, though its market share remained flat at 5.2%.
"Despite prices continuing to decline, the combination of Valentine's Day, and consumers stocking up for an early Easter has boosted certain categories. February chocolate sales are up by 13%, cut flowers have increased by 7%, and sparkling wine sales are up by 15%. New Year resolutions to eat more healthily don't seem to have been forgotten, helping fruit and vegetable revenues to grow by 4% despite like-for-like produce prices falling," McKevitt said.
Also of interest, McKevitt noted that he does not think an extension to Sunday trading hours will help boost supermarket sales. According to the analyst, 32% of households visit a grocer on a Sunday in an average week, considerably fewer than the 46% visiting on a Saturday, the most popular day to shop.
McKevitt highlighted that when stores opened for the full day during the 2012 Olympics and Paralympics, there was only a marginal increase in the proportion of groceries bought on a Sunday, "suggesting longer opening hours won't necessarily translate into greater sales".
Grocery deflation now stands at 1.6%, meaning shoppers are paying less for a representative basket of groceries than they did in 2015. This is the 19th consecutive period of grocery price deflation, with falling prices reflecting the impact of Aldi and Lidl and the market's competitive response, as well as deflation in some major categories such as crisps, eggs and butter.
The British Retail Consortium also released sales figures on Tuesday. It reported a 1.1% rise in total UK retail sales in February, although this was lower than the 1.7% growth recorded in February 2015. On a like-for-like basis, UK retail sales were up 0.1%, again lower than the 0.2% growth the year before.
The BRC said growth was mostly driven by furniture and home accessories, while food, clothing and footwear all experienced declines on a like-for-like basis.
"February's slowdown was noticeable across all product categories bar stationery and health & beauty, as Valentine's Day provided a welcome growth spurt for those retailers well prepared for the occasion. The fashion categories struggled while some growth was noted in books and vision. Competition remained strong in the grocery sector, while consumers proved willing to spend money on large ticket items, namely furniture, driving the month's performance," Chief Executive of the BRC Helen Dickinson said.
Sainsbury's shares were down 0.7% to 268.60 pence on Tuesday morning, while Tesco shares were up 2.4% to 196.46p. Morrisons shares were down 3.0% to 203.10p, one of the worst performers in the FTSE 250.
By Sam Unsted; [email protected]; @SamUAtAlliance and Karolina Kaminska; [email protected] @KarolinaAllNews
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