UK grocery sales growth has slowed, with Asda lagging behind its competitors.
- Sales growth for UK supermarkets reduced to 4.0% over the past month.
- Consumers are tightening budgets amidst financial pressures, affecting grocery essentials.
- Ocado and Lidl have emerged as the fastest-growing UK grocers recently.
- Asda plans significant investments to improve customer experience during the holiday period.
In recent weeks, the growth of UK grocery sales has decelerated, with new data revealing a drop from 4.7% in the previous month to 4.0% year-on-year for the last four weeks until 2 November. Consumers are exercising caution, saving on grocery essentials to afford holiday treats, as noted by NIQ UK’s Head of Retailer and Business Insight, Mike Watkins. Half of UK’s households continue to feel financial pressures, influencing spending habits significantly.
Alongside these trends, general merchandise sales decreased by 1.4% in value, with volume sales dropping more sharply by 5.5%. These figures align with Kantar’s data, revealing that Ocado and Lidl are the fastest-growing retailers, recording growth of 16.1% and 11.9% respectively over the 12 weeks leading up to 2 November.
In this competitive landscape, M&S also displayed robust performance, securing third place with an 11.4% growth. Market leader Tesco saw a 4.7% rise in market share, closely followed by Sainsbury’s with a 4.6% increase. Meanwhile, Asda is facing challenges, experiencing a sales decline of 3.5% and a 1% drop in market share over the year.
To address these challenges and enhance customer experience, Asda announced a £13 million investment in staffing hours during the critical holiday quarter. This strategic move comes as part of a broader transformation initiative led by Lord Stuart Rose, following Mohsin Issa’s departure from day-to-day operations. The investment aims to better equip the retailer to handle increased holiday footfall, although much work remains to regain its competitive edge.
As the holiday season approaches, Asda must adapt to changing consumer behaviours and strengthen its market position amidst fierce competition across the UK grocery sector.
