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UK supermarket sales were lifted by Jubilee festivities in June, despite inflation reaching the highest level since April 2009, new data showed on Tuesday.
According to the latest survey by Kantar, UK grocery sales fell by 1.9% to £30.19 billion over the last 12 weeks to June 12 from the same period a year before. This was the best performance since October of last year.
In the last four weeks, Kantar recorded growth of 0.4% year-on-year in supermarket sales.
‘The sector hasn't been in growth since April 2021 as it measures up against the record sales seen during the pandemic. However, these latest numbers show the market is to an extent returning to pre-Covid norms as we begin comparisons with post-lockdown times,’ commented Fraser McKevitt, head of retail and consumer insight at Kantar.
Inflation continued accelerating, however, reaching 6.7% for the 12 week period. This was higher than the 5.7% for the 12 weeks to May 15.
In the last month, grocery inflation hit 8.3% - the highest level since April 2009.
‘The inflation number makes for difficult reading and shoppers will be watching budgets closely as the cost-of-living crisis takes its toll. Based on our latest data, the average annual grocery bill is on course to rise by £380. This is over £100 more than the number we reported in April this year, showing just how sharp price increases have been recently and the impact inflation is having on the sector,’ McKevitt continued.
Despite grocery inflation reaching a decade-long high, sales were £87 million higher on average during the week of the Queen's Platinum Jubilee, with alcohol sales up by a third and ice cream sales up by over 35%.
Tesco PLC outperformed the sector average, with a sales decline of only 1.1% to £8.25 billion over the 12 week period, and market share edging up slightly to 27.3% from 27.1% a year prior.
J Sainsbury PLC's sales fell 3.9% to £4.48 billion during the period, as market share decreased slightly to 14.9% from 15.2%.
Ocado Group PLC sales fell 2.3% to £535 million, as it retained a 1.8% market share.
‘Online sales have been suffering since the end of the pandemic. This is the twelfth month in a row they've been in decline and digital orders fell by almost 9% in June. As well as the return to pre-Covid habits, this drop could be the result of shoppers looking to cut costs by avoiding delivery charges. The sunnier weather may also be pushing up store footfall, as people decide it's warm enough to walk or cycle to their local supermarket,’ McKevitt noted.
Supermarket heavyweights Asda and former London listing Wm Morrison Supermarkets fared worse than the sector average, with sales declining by 4.8% and 7.2% respectively. Asda's market share decreased to 13.7% from 14.1%, and Morrisons' share fell to 9.6% from 10.1%.
Bucking the downward trend, German discounters sales rose as price-conscious consumers sought value for their money, and shied away from brand names.
Lidl's sales jumped 9.5% year-on-year, with Aldi's rising by 7.9%. Both grocers' market share rose by 0.8 of a percentage point, with Lidl reaching 6.9% and Aldi 9.0%.
Shares in Tesco were down 0.2% in London on Tuesday morning, with Sainsbury's down 0.1%. Ocado shares were down 4.9% after it announced the results of its £578 million fundraise.
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