Grocery sales across the UK have shown signs of deceleration, with Asda experiencing a notable decline compared to its competitors.
Recent data highlights a significant slowdown in grocery sales growth in the UK, with Asda being particularly affected. In the four weeks leading up to 2 November 2024, growth in total till sales dropped to 4%, down from 4.7% the previous month, as per the latest insights from NIQ. This change comes as shoppers tighten their spending in preparation for the Christmas season and Black Friday sales.
Despite easing inflation rates, the average spend per visit decreased by 6% year-on-year, reaching £18.67. NIQ’s UK head of retailer and business insight, Mike Watkins, commented on the situation, noting that consumers are becoming more cautious. Watkins stated: “Total Till sales over the last four weeks have slowed, with shoppers pulling back their spend.”
This consumer cautiousness is evident in spending patterns, with many prioritising savings on essential groceries to afford occasional indulgences. Confectionery sales increased by 10.5% during this period, as people stocked up for Halloween and the approaching Christmas holidays. Conversely, there was a slight decline of 0.4% in unit sales of beer, wine, and spirits, suggesting that consumers are waiting until closer to festive occasions to make these purchases.
Watkins further pointed out the potential impact of Christmas advertising campaigns, which present an opportunity for brands and retailers to attract consumer interest by highlighting new and unique products. With many households expected to choose dining at home more frequently in the coming weeks, there is an anticipated rise in sales of premium private label food and beverages, as forecasted by NIQ.
In contrast to Asda’s downturn, other retailers have shown marked growth over the past 12 weeks. Ocado emerged as the fastest-growing retailer with a 16.1% increase in sales. Lidl and M&S also experienced significant growth, with sales rising by 11.9% and 11.4% respectively. Tesco and Sainsbury’s managed to increase their sales by 4.7% and 4.6%, gaining market share in the process. Meanwhile, Asda reported a 3.5% drop in sales alongside a one percentage point loss in market share over the year.
As the festive season approaches, UK grocery retailers face a challenging landscape. While some, like Ocado and Lidl, are experiencing growth, Asda’s recent performance highlights the pressures facing consumers and retailers alike. Strategic Christmas promotions and advertising campaigns may play a crucial role in influencing consumer spending patterns in the coming weeks.
