Grocery sales at convenience stores are on
the rise, bucking the continuing trend of slowing grocery sales at the UK’s
leading supermarkets, according to the latest data from Nielsen.
During the four weeks ending 29 March 2014, consumers spent -4.3% less (value) at the big supermarkets than the same period a year ago, buying -4.8% fewer units. However, the declines are due to last year’s Easter build-up, which always boosts sales at out of town stores, occurring in the corresponding period.
In contrast, value sales at the smaller convenience stores were up +0.6% year-on-year, despite last year’s early Easter.
“The underlying trend of shoppers moving away from larger to smaller stores continues,” said Nielsen’s UK head of retailer and business insight Mike Watkins.
“Historically, traditional convenience stores were used for immediate or ‘distress’ purchasing, however, the huge investment by the major supermarkets has transformed this format. The likes of Tesco Express, Sainsbury’s Local and Co-operatives now offer a greater variety of food and drink which can be purchased ahead for the next few days, so basket sizes and spend per visit are increasing.”
Although grocery trips that involve buying 1-5 items account for the majority (54%) of visits, Nielsen data shows they’re becoming less popular at the expense of 6-10 item baskets which now account for 20% of all trips – up 2.2% annually. Watkins commented: “It’s these 6-10 item shopping trips that are becoming the new battle ground in convenience.”
Aside from location (51%), value for money (43%) is the main reason why people choose where they do their “top up” grocery shopping – cited by twice as many shoppers than low prices (21%).
Meanwhile, Nielsen said that supermarket TV/press ad spend had dropped 35% due to ‘seasonality’; Iceland with biggest increase Again, due to last year’s early Easter, the UK’s 10 leading supermarkets spent 35% less on TV and press advertising in the four weeks ending 29 March (£23.0m in total) than in the same period a year ago.
Tesco spent the most on TV and press advertising in this period (£5.0m), narrowly ahead of Asda (£4.9m). Iceland had the biggest year-on-year increase in spend (+93%) among the top 10 supermarkets. Lidl (+49%) and Asda (+2%) were the only other two to increase spend year-on-year.
Watkins concluded: “Overall, trading momentum continues to be slow for all supermarkets ahead of Easter, particularly with slowing food inflation. The recent round of price cuts by some supermarkets, noticeably Morrisons, to stimulate sales hasn’t yet changed the retail landscape and is likely to take months to achieve.
“Waitrose and M&S continued their strong sales performance while Asda was the pick of the top four. The Co-operative is also benefiting from the shift towards convenience shopping, with trend figures better than all the top four. Shoppers continue to economise – but not compromise – and Aldi and Lidl still seem immune from weak consumer demand, entering the Easter trading period with even stronger momentum than last year.”
During the four weeks ending 29 March 2014, consumers spent -4.3% less (value) at the big supermarkets than the same period a year ago, buying -4.8% fewer units. However, the declines are due to last year’s Easter build-up, which always boosts sales at out of town stores, occurring in the corresponding period.
In contrast, value sales at the smaller convenience stores were up +0.6% year-on-year, despite last year’s early Easter.
“The underlying trend of shoppers moving away from larger to smaller stores continues,” said Nielsen’s UK head of retailer and business insight Mike Watkins.
“Historically, traditional convenience stores were used for immediate or ‘distress’ purchasing, however, the huge investment by the major supermarkets has transformed this format. The likes of Tesco Express, Sainsbury’s Local and Co-operatives now offer a greater variety of food and drink which can be purchased ahead for the next few days, so basket sizes and spend per visit are increasing.”
Although grocery trips that involve buying 1-5 items account for the majority (54%) of visits, Nielsen data shows they’re becoming less popular at the expense of 6-10 item baskets which now account for 20% of all trips – up 2.2% annually. Watkins commented: “It’s these 6-10 item shopping trips that are becoming the new battle ground in convenience.”
Aside from location (51%), value for money (43%) is the main reason why people choose where they do their “top up” grocery shopping – cited by twice as many shoppers than low prices (21%).
Meanwhile, Nielsen said that supermarket TV/press ad spend had dropped 35% due to ‘seasonality’; Iceland with biggest increase Again, due to last year’s early Easter, the UK’s 10 leading supermarkets spent 35% less on TV and press advertising in the four weeks ending 29 March (£23.0m in total) than in the same period a year ago.
Tesco spent the most on TV and press advertising in this period (£5.0m), narrowly ahead of Asda (£4.9m). Iceland had the biggest year-on-year increase in spend (+93%) among the top 10 supermarkets. Lidl (+49%) and Asda (+2%) were the only other two to increase spend year-on-year.
Watkins concluded: “Overall, trading momentum continues to be slow for all supermarkets ahead of Easter, particularly with slowing food inflation. The recent round of price cuts by some supermarkets, noticeably Morrisons, to stimulate sales hasn’t yet changed the retail landscape and is likely to take months to achieve.
“Waitrose and M&S continued their strong sales performance while Asda was the pick of the top four. The Co-operative is also benefiting from the shift towards convenience shopping, with trend figures better than all the top four. Shoppers continue to economise – but not compromise – and Aldi and Lidl still seem immune from weak consumer demand, entering the Easter trading period with even stronger momentum than last year.”
NamNews - Monday 14th April 2014
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