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Supermarket sales suffer slowdown as shoppers hold off Christmas splurge ahead of election

The data also revealed further declines among the UK's 'big four' grocers, with Morrisons the biggest loser as its sales fell 2.9%

WM Morrison Supermarkets PLC - Supermarket sales suffer slowdown as shoppers hold off Christmas splurge ahead of election

Sales growth across Britain’s supermarkets have suffered a slowdown in recent months as shoppers seem to be holding off the traditional Christmas spending splurge amid political uncertainty ahead of Thursday’s election.

Kantar data for the 12 weeks ended 1 December showed that sales grew 0.5% in the period, slowing from 2% in the same period last year, indicating that shoppers had made one fewer visit to the shops than in 2018.

READ: Supermarket sales grow again; J Sainsbury returns to growth

“With the general election now only days away, people are waiting to fill their cupboards for the festive break and sales of Christmas puddings and seasonal biscuits are down 16% and 12% in the past four weeks, compared with this time last year”, said Fraser McKevitt, Kantar’s head of retail and consumer insight.

Traditional Black Friday discounting across retailers had also failed to provide much of a boost, with the data revealing that only 5% of deal hunters in the period made a purchase from any of the UK’s big grocers, while the overall number of people claiming to have taken advantage of the sale period dropping to 53% from 57% in 2018.

McKevitt said the decline in Black Friday shoppers showed sins of “promotion fatigue among consumers” as well as an “increased scepticism regarding the value of the deals on offer and some retailers pulling back from the day all together”. 

Morrisons biggest loser among ‘big four’

Into the market share figures. All of the UK’s ‘big four’ grocers suffered declines in their sales and market share, with WM Morrison Supermarkets PLC (LON:MRW) the biggest loser with a loss of 2.9% to 10.1%.

Walmart Inc (NYSE:WMT) owned Asda followed behind with a 1.9% drop to 14.6%, while J Sainsbury PLC (LON:SBRY) and Tesco PLC (LON:TSCO) falling 1.1% to 15.7% and 0.8% to 27.3% respectively.

Despite the overall drop in the ‘big four’ market share, which fell to 67.7% from 69.1% last year, McKevitt expects the UK’s biggest players to increase their proportion of overall sales over the coming week as shoppers turned to the “familiar favourites” over the Christmas period.

Meanwhile, the German discounters continued their ascent, with Lidl achieving a new record market share of 6.1% after a 9.3% surge in sales. Aldi, meanwhile, delivered a 6.2% increase to 8%.

“The good news continues for Lidl and 11.9mln shoppers visited one of its stores in the past three months – that’s 652,000 more than this time last year”, McKevitt said.

“Lidl has been encouraging its customers to make bigger shops, running newspaper voucher deals that offer £10 off when the holder spends £40, and larger baskets over the qualifying spend made up 17% of trips in November”, he added.

However, the biggest sales increase came from online grocer Ocado Group PLC (LON:OCDO), which jumped 13.7% in the 12 weeks to 1.4% market share.

The new figures sent shares in Morrisons down 2.6% to 198.5p in early deals on Tuesday, while Sainsbury’s slipped 1% to 221.2p and Tesco dipped 0.3% to 242.5p. Ocado was the only riser among the London-listed grocers, up 1% at 1,216.5p.

Quick facts: WM Morrison Supermarkets PLC

Price: 196.25 GBX

Market: LSE
Market Cap: £4.73 billion

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