UK grocery sales growth has decelerated amidst shoppers’ cautious spending, aligning with upcoming holidays.
- NIQ data reveals a decrease in overall supermarket sales, dropping from 4.7% to 4.0% year-on-year.
- Asda, ranking third among competitors, has experienced a notable decline in sales and market share.
- Retailers Ocado and Lidl continue to outperform others with significant growth over recent weeks.
- Asda plans a £13 million investment to improve services during the holiday season, aiming to boost consumer engagement.
Recent data indicates a slowdown in UK grocery sales growth, with consumers exercising caution in their spending as they anticipate Black Friday and Christmas. According to NIQ, overall sales growth slowed to 4.0% in the four weeks leading up to 2 November, a decline from the previous month’s 4.7%. Shoppers are evidently prioritising essentials over more indulgent purchases due to ongoing financial pressures.
Asda, which holds the third position among UK supermarkets, faces a challenging landscape as it continues to lag behind its competitors. Over the past year, Asda has seen a 3.5% drop in sales and a corresponding 1% decrease in its market share. This performance stands in contrast to competitors such as Ocado and Lidl, which have demonstrated robust growth. Ocado’s sales increased by 16.1%, and Lidl followed with an 11.9% rise over a twelve-week period ending on 2 November.
Mike Watkins of NIQ commented on consumer behaviour, explaining, “Shoppers so far have been cautious and it’s evident that they are saving on grocery essentials to be able to afford treats and indulgences.” This sentiment reflects the broader consumer trend of balancing necessary expenses with occasional splurges, leading to a polarised market where half of the households feel financial strain.
Amid these market dynamics, Asda has announced a plan to invest £13 million in extending store hours during the holiday quarter. This strategic move is expected to facilitate better customer service by increasing staff availability at peak shopping times. The initiative is part of Asda’s broader transformation efforts, guided by Lord Stuart Rose, following changes in the leadership with Mohsin Issa stepping back.
In summary, while the UK grocery market experiences a slowdown in growth, differing strategies among retailers highlight a competitive environment. Asda’s focus on operational improvements seeks to regain ground, although the market remains competitive with strong performances from Ocado and Lidl.
Asda’s strategic investments aim to improve its market position amidst slowing UK grocery sales, though challenges remain.
