- Aldi and Lidl hit a combined market share high, according to Nielsen
- Value of sales falls 2.4% in four weeks ending July 16
- Kantar data reveals Tesco registered slowest rate of market share loss since March 2014
- Asda increases proportion of sales on promotion as it bids to regain share
Supermarket sales have hit their lowest point in two years following last month’s wet weather, but the discounters continued to grow.
The value of sales dropped 2.4% during the four weeks ending July 16 compared to the same period a year ago, according to the latest supermarket sales figures from Nielsen. Excluding an Easter-inflated period, this marked the worst performance within the sector since July 2014.
Supermarket sales volumes fell 1.5%, the worst figure since September 2014.
Nielsen UK head of retailer and business insight Mike Watkins said the big four are being “hit from both sides”.
He said: “The weather is having a big impact on the industry at the moment, adding further pressure on sales from deflation and responding to the growth of discounters.
“With falling spend per visit, supermarkets are becoming more reliant on attracting new shoppers and encouraging loyalty from repeat visits in order to maintain sales momentum.
“At the moment, big but short-term events such as Euro 2016 and the upcoming Rio Olympics are not enough to drive topline sales.”
Discounters grow again
Aldi’s sales surged 18.2% year-on-year, while Lidl’s grew 12.3%.
Watkins said: “A common thread across all these retailers is a small store format.”
Rival data from Kantar Worldpanel revealed that Tesco stemmed its rate of market share decline during the 12 weeks to July 17.
The supermarket giant’s sales dipped 0.7% during the period, as its market share inched down 0.2% - its slowest rate of share loss since March 2014.
Sainsbury’s also suffered a 0.2% dip in market share after its sales fell 1.1% across the three months.
Asda continued to be the worst performing member of the big four, posting a 5.6% drop in sales.
But the grocer’s US owner Walmart has vowed to focus on driving sales rather than protecting profits and has already started to signal that intent after increasing the proportion of sales made on promotion compared with last year.
Big four rival Morrisons recorded its best result since January as sales fell by 1.8%, while Iceland, the Co-op and Waitrose all grew sales by 2.8%, 2.1% and 1.6% respectively.
But that growth was drawfed by Lidl, whose sales surged 12.5%, and Aldi, which posted an 11% uplift - although this was its slowest rate of growth for five years.
Kantar Worldpanel head of retail and consumer insight Fraser McKevitt said: “The EU referendum result has had no immediate impact on the prices retailers are charging or the sales volumes consumers are buying over the past 12 weeks.
The nation’s average shopping basket is 1.4% cheaper than a year ago, exactly the same level of deflation as reported last month, and it remains to be seen if the Brexit vote will bring about any price rises this year.”