Grocery sales return to slow growth after disappointing Christmas

After a disappointing Christmas sales period, the British grocery market has returned to slow growth according to Kantar Worldpanel.

Figures for the 12 weeks to 31 January 2016 show take-home sales increased 0.2% compared to the previous year, driven by New Year resolutions to eat healthy.

“Consumers are clearly striving for a healthier start to the year and have turned to fresh foods – particularly fruit and vegetables, which have both grown sales by 5%,” said Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel.

“Given that they’re still experiencing like-for-like deflation it’s a significant revenue growth for both categories, shared across both traditional and discount retailers.”

Data from Kantar Worldpanel showed sales at Sainsbury’s increased for the sixth period in a row, up 0.6%, as well as an increase in its market share by 0.1 percentage points to 16.8%.

While Tesco’s revenues fell 1.6% for the period, it was the best set of numbers from the retailer since September 2015.

Morrisons' sales decline lessened to 2.2%, while market share fell by 0.3 percentage points to 10.8%, with disposal of 140 M Local stores and the closure of some larger outlets through the rest of 2016 set to hit sales figures

Meanwhile Asda’s recent renewed price cuts haven’t materially affected its latest 12 week figures, with sales falling by 3.8% and market share falling back to 16.2%.

Waitrose’s market share remained static at 5.2% but sales increased 0.1% - the 91st consecutive period of growth for the retailer.

For the first time since 2011 the Co-operative was the fastest growing non-discounter, increasing sales by 1.4% and growing its own-label sales by 7%.

Meanwhile, recent trends at Aldi and Lidl continued with sales jumping 18.7% and 13.7% respectively, and both seeing a 0.7 percentage point increase in market share to 4.2% and 5.6%.

“We can expect both retailers to continue to take market share this year as they fulfil their plans for more outlets,” said McKevitt.