Supermarket growth stumbles to slowest since March 2017 - Kantar

UK supermarkets have plunged into the gloom blanketing the rest of the retail sector, with fresh data on Tuesday showing the slowest growth rate since March 2017.

Grocery sales in the 12 weeks ending 2 December slowed to 2.0%, Kantar Worldpanel revealed, from 2.6%, 3.2% and 3.8% in the past three updates.

Shop price inflation falling to 1.6% was cited as a key reason for the spending decline, down from the 3.6% rate seen a year ago.

"Over the summer shoppers upped their weekly trips to the grocers as they took advantage of the hot weather, but with the mercury dropping the number of trips has tailed off – again contributing to waning market growth,” said Fraser McKevitt, Kantar Worldpanel's head of retail and consumer insight.

Asda led the big four ahead of Christmas, continuing its strong recent run with sales up 1.5%, while Morrisons recorded 0.5% growth against a strong comparative last year.

The two largest supermarket groups were both negative, with Tesco down 0.1% and Sainsbury's sales reversing 0.2%.

Despite the slowdown in recent weeks, Kantar predicted Christmas spending will still break records, with spending expected to reach as high as £10bn for the whole of December as grocers have an extra trading day this year.

“The last time Christmas Day fell on a Tuesday was in 2012 and the Saturday before was the busiest shopping day of the year. We expect the same trend to hold true this year, with Saturday 22 December pulling in the last-minute Christmas crowds," said McKevitt, adding that more than one in eight households have already bought a Christmas pudding, while boxed chocolate sales have reached £292m and Brussel sprout £18m so far.

Despite the uncertain political climate taking its toll on consumer confidence, as shown by grim recent surveys from Barclays and GfK, Kantar said that shoppers are still willing to spend that little bit extra on more expensive goods, with total premium own-label lines growing 5.5% and anticipated to lead to record sales in this price tier.

While Waitrose continued to suffer, with sales down 0.7%, Co-op and Ocado continued their good form with sales up 4.5% and 3.4% respectively.

Aldi and Lidl, continued to pace the industry growth, however. Helped by new store openings, including in Barnet and Archway in London, Aldi grew sales 12.2% and saw its market share rise by 0.7 percentage points to 7.6%, while Lidl’s recent discounts on axes, sledgehammers, chainsaws and panettone helped it boost market share 0.5 percentage points to 5.6% as sales grew 11.2%.