Retailers rely on events to attract shoppers as sales growths stall
Sales performances in the grocery sector remain sluggish for a second month as shopper caution continues
Year on year growth in grocery multiples fell slightly to +2.3% in the 4 w/e 20th February with overall fmcg sales growing at 2.1% compared with last February. Unit growths, helped by promotions, were +1.1% for the grocery multiples and +0.5% overall for the same period.The figures confirm that any recovery will be long and slow but also reflect the fact that food inflation is much lower than a year ago, so sales values are no longer being driven up by escalating cost prices.
Mike Watkins, senior manager retailer services at Nielsen commented: “The level of promotions in February stood at 34% which is similar to that usually seen at key seasonal trading periods.Despite this, sales have remained subdued.Some retailers have been relying on seasonal events such as Valentine’s or Chinese New Year to drive sales up.We expect to see further activity like this and also more use of tactical deals as we approach Mothering Sunday. And thereafter the Easter promotional activity will really kick in.”
He added, “At a category level, general merchandise value growths have been buoyant at the grocery multiples but packaged grocery saw value growths slow against strong 2009 comparisons. Sales of chilled foods, BWS and confectionery have been boosted by meal deals and seasonal promotions.”
When looking at individual performances, Tesco’s sales grew 5.7% YoY in the 12 weeks to 20th February, ahead of major competitors and the retailer picked up market share versus the same time last year. Morrisons and Waitrose continued to grow significantly ahead of the market with the Co-op also turning in a double digit sales growth as its takeover of Somerfield continues to gain momentum.
