Supermarket sales down for first time since June 2016

Supermarket sales fell by 0.5% over the last quarter in the first overall decline in the sector since June 2016, figures show.

Falling sales reflected last year’s record summer as spending on traditional hot weather staples such as alcohol and ice cream declined in comparison, Kantar said.

Sales fell year-on-year at all of Britain’s big four supermarket groups over the 12 weeks to July 14.

Tesco saw a 2% drop, while Sainsbury’s, Asda and Morrisons suffered 2.3%, 2% and 2.6% falls respectively.

All of the big four lost market share to Aldi, whose sales were up 6.7%, and Lidl, up 7%.

However e-commerce specialist Ocado was the standout retailer with its customers buying online more frequently than last year.

Fraser McKevitt, head of retail and consumer insight at Kantar, said: “The main factor behind the sales drop-off is shoppers heading out to stores less often. Last year people shopped more frequently and closer to home as they topped up the cupboards while enjoying the sunshine and the men’s football World Cup.

“This year households are making one fewer trip, which may not sound like much but is enough to tip the market into decline.”

Consumers spent £75 million less on alcohol this year compared to last, with beer down 11% and cider down 13%.

Soft drinks sales fell by £56 million and ice cream by £55 million.

Analysts Nielsen also recorded a 0.5% sales drop over the last four weeks despite the start of warm summer weather at the end of June and the UK sporting season.

Shoppers also spent less per visit compared with the same period last year, the figures show.

Mike Watkins, Nielsen’s UK head of retailer and business insight, said: “Our latest data shows that some of the weakness in recent grocery spend is linked to the strong summer of 2018, where the warm weather peaked and consumer spirits were high on the events of the World Cup.

“This year, retailers have had to work harder to drive shoppers to spend, and the increase in press and TV advertising spend proves that retailers are looking at more creative ways to achieve this.”

He added: “However, the drop in sales is also a sign that consumers are starting to change how they spend. This suggests that with the summer holiday season now under way, retailers will need to push hard to encourage shoppers to keep spending – particularly while the sun still shines – as there may well be clouds on the horizon.”