UK grocery sales fall for first time in three years as alcohol and ice cream sales plunge

Last year’s heatwave meant us Brits forked out more on things such as beers, cider and ice cream, but with the weather much duller this summer, grocery sales have dropped

ice cream on floor
Ocado was the only major retailer to see its sales growth accelerate

UK grocery sales fell for the first time in more than three years in the latest 12-week period, according to industry data.

Market research group Kantar said in the three months to 14 July had been a “challenging” period for British grocer’s, although not entirely unexpected given last year’s tough comparatives.

READ: 'Big Four' lose more share to Aldi and Lidl

The absence of last summer’s heatwave meant Brits spent £75mln less on alcohol this time around, while sales of ice cream plunged by £55mln.

“The main factor behind the sales drop-off is shoppers heading out to stores less often,” said analysts in the latest Grocery Market Share report.

“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.”

‘Big Four’ sales decline

Sales at Britain’s ‘Big Four’ supermarkets – Tesco PLC (LON:TSCO), J Sainsbury PLC (LON:SBRY), Asda and WM Morrison Supermarkets PLC (LON:MRW) – fell by a collective 2.1%.

Once again, all four saw the German discounters eat into their market shares.

Lidl was the fastest-growing bricks-and-mortar food retailer during the latest 12-week period, with sales up 7.0%, largely due to a surge in alcohol sales thanks to its 25% offer when buying six bottles or more.

Aldi reached new record share of the market and now accounts for 8.1% of all UK grocery sales, after growing sales by 6.7% over the period.

Still, even the discounters’ growth slowed during the three months. Online specialist Ocado Group PLC (LON:OCDO) was the only major retailer to grow sales by a greater percentage than it did last year – up 11.9%.

Shares in Tesco, Sainsbury’s and Morrisons were all down by around 2% on Tuesday morning, while even Ocado’s stock dropped on the back of the data.

Quick facts: Tesco

Price: £2.16

Market: LSE
Market Cap: £21.12 billion

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