Spending on everyday items sees weakest year-on-year showing in almost two years

The amount UK consumers spend on everyday items has suffered its worst year-on-year performance for nearly two years, with the third biggest decline among 21 European countries, latest figures show.

Analysts Nielsen said the UK's 1.6% quarterly decline was primarily driven by fierce competition among retailers.

The prices shoppers paid for fast-moving consumer goods (FMCGs) rose just 0.7% year-on-year across Europe in the second quarter, while volumes rose 0.1% - the lowest level for over two years, according to Nielsen retail performance data.

As a result retailers saw just a 0.8% increase in takings, the lowest ever figure since measurement began in the final quarter of 2008.

Among the big five western European markets, Spain had the highest growth at 2.1%, followed by Italy (1.2%), while the UK had its worst performance for nearly two years with a drop of 1.6%.

Nielsen's European director of retail insights, Jean-Jacques Vandenheede, said the historically low performance across Europe was driven by the timing of Easter compared with last year and, more significantly, fierce price competition among retailers.

He said: "Southern Europe was often to blame for Europe's poor performance but it's currently doing quite well, whilst northern Europe is today's problem child."

The big four grocers have been struggling to protect their market share from the rise of German discounters Aldi and Lidl.

Meanwhile, the UK launch of online grocery service AmazonFresh in June looks set to make the grocery sector even tougher.