Grocery sales fall in May as promotions rise

Grocery spending was down 1.6% overall in the most recent four weeks, the latest Nielsen data showed. Nielsen described the fall as “significant”, but said the comparative period last year had been a “bumper” time for grocers, helped by a heatwave and the Royal wedding.

This year’s anniversary celebrations by Sainsbury’s and Tesco, respectively 150 and 100 years old, contributed to a rise in promotions across the sector to account for 27% of sales.

Sales fell over the 12 weeks to May 19 at all of the big four grocers with the exception of Tesco, which was up 0.3%. The worst performer among the big four was Sainsbury’s, down 2%, while M&S’ sales declined 0.6%.

Aldi and Lidl’s sales rose 11.2% and 15.7% respectively. The next best performers were the Co-op, up 2.7%, and Iceland, up 2.6%.

Nielsen said TV and press advertising spend increased 4% year on year to £80.6m in the period from January to April.

Nielsen UK head of retailer and business insight Mike Watkins said: “Recent advertising seems to be resonating well with the 12 million households looking to save money on grocery shopping and we anticipate that shoppers will be responding well to the price cuts and promotions associated with the milestone anniversaries at Sainsbury’s and Tesco.

“Yet it’s important to note that the structural shift of sales away from traditional supermarkets continues, with Aldi and Lidl still gaining combined market share. With six in 10 households visiting these two discounters every four weeks – compared to 40% just five years ago – and new store openings, they continue to grow sales fast.”