Bracknell - January 31, 2005 - IRI (Information Resources) today announced that overall value sales in the final quarter of 2004 were up by less than 1% through the major supermarkets and health and beauty retailers.
This was caused by a further fall in grocery sales growth (-0.6%), despite the indulgent Christmas period. Non-food sales continued to grow with sales up by 3.9%, although this has slowed from the 7.9% growth achieved in the same quarter of 2003.
Full year figures are more promising with total sales up by 2.5% compared to last year. Within this figure, both grocery and non-food sales were up. This is a positive achievement when compared to the good sales growth in 2003, as well as constant pressures on retailers to reduce prices.
The sales decline could also be attributed to the conversion of more Safeway stores to the Morrisons name, as stores from this retailer are not covered in this report.
Trends by category
Sales of chilled foods continued to grow, with fresh milk topping the year end contribution figures. This could be due to price increases in fresh milk, as well as the growing popularity of pro-biotic milk and yogurt drinks. The growth of higher priced organic milk could also have boosted value sales.
While full year sales of beers, wines and spirits were up by 3.2%, sales for the quarter were only up by less than 1%. This reflects the amount of price competition and promotions offered by retailers in the run up to Christmas. This was particularly true with beers sales which fell by 2.1% compared to Q4 in 2003.
Fresh meat sales fell in the run up to Christmas, including an unseasonable downfall in poultry sales. This could reflect a trend for less traditional Christmas dinner, or for not shopping at supermarkets on special occasions. The National Farmers’ Union have estimated that of the nine million turkeys eaten this Christmas, one million were bought directly from farms.
Static full year ambient sales reflect a mixed bag of results. Confectionery, eggs, baking products and cereals performed well, while soft drinks, crisps, snack and nuts, tea and canned fish all continued to decline.
Despite the bombardment of healthy eating messages, produce sales were static for the full year, and declined in the quarter. This was compared to good sales in 2003, although a recent IGD report suggests that while fruit consumption has risen by 3.8% since the launch of the 5-a-day campaign in 2000, vegetable consumption has declined by 2.1%.
Sales continue to decline for frozen food. Efforts to rejuvenate this sector have not yet shown signs of improvement with value in all sectors other than frozen meat declining in 2004. Success perhaps lies with changing consumer perceptions which on the whole favour chilled products.
‘Other non-food’ continues to grow, especially in the last quarter of the year which brings opportunities for expansion into more diverse non-food lines. Seasonal categories such as greetings cards and wrap, stationery, and computer games all experienced double digit growth.
Heavy price competition between retailers has affected the value of health and beauty sales which were fairly static. Medicines in particular have suffered in the quarter due to a large outbreak of colds and flu in the same period of 2003, as well as the later start to the flu season in 2004.
While pet food sales have pulled the performance of the petcare category downwards, the non-food pet sector continues to grow as retailers stock wider ranges of non-food items for animals.
Sales in the household category have suffered from a lack of major innovation in 2004 which can help to boost value through premium priced new products. A plethora of promotions in this category have also not helped in the effort to drive sales.
While full year sales of beers, wines and spirits were up by 3.2%, sales for the quarter were only up by less than 1%. This reflects the amount of price competition and promotions offered by retailers in the run up to Christmas. This was particularly true with beers sales which fell by 2.1% compared to Q4 in 2003.
Fresh meat sales fell in the run up to Christmas, including an unseasonable downfall in poultry sales. This could reflect a trend for less traditional Christmas dinner, or for not shopping at supermarkets on special occasions. The National Farmers’ Union have estimated that of the nine million turkeys eaten this Christmas, one million were bought directly from farms.
Static full year ambient sales reflect a mixed bag of results. Confectionery, eggs, baking products and cereals performed well, while soft drinks, crisps, snack and nuts, tea and canned fish all continued to decline.
Despite the bombardment of healthy eating messages, produce sales were static for the full year, and declined in the quarter. This was compared to good sales in 2003, although a recent IGD report suggests that while fruit consumption has risen by 3.8% since the launch of the 5-a-day campaign in 2000, vegetable consumption has declined by 2.1%.
Sales continue to decline for frozen food. Efforts to rejuvenate this sector have not yet shown signs of improvement with value in all sectors other than frozen meat declining in 2004. Success perhaps lies with changing consumer perceptions which on the whole favour chilled products.
‘Other non-food’ continues to grow, especially in the last quarter of the year which brings opportunities for expansion into more diverse non-food lines. Seasonal categories such as greetings cards and wrap, stationery, and computer games all experienced double digit growth.
Heavy price competition between retailers has affected the value of health and beauty sales which were fairly static. Medicines in particular have suffered in the quarter due to a large outbreak of colds and flu in the same period of 2003, as well as the later start to the flu season in 2004.
While pet food sales have pulled the performance of the petcare category downwards, the non-food pet sector continues to grow as retailers stock wider ranges of non-food items for animals.
Sales in the household category have suffered from a lack of major innovation in 2004 which can help to boost value through premium priced new products. A plethora of promotions in this category have also not helped in the effort to drive sales.
Background data
| |
52 Weeks to end December 2004
|
12 wks to Dec 2004
|
| |
Value Sales
(m)
|
% change
|
% contribution*
|
% change
|
| Total Sales |
£73,783
|
2.5
|
|
0.9
|
| Grocery |
£49,517
|
1.0
|
0.7
|
-0.6
|
| Chilled |
£12,110
|
3.6
|
0.9
|
1.8
|
| Beers, Wines & Spirits |
£6,427
|
3.2
|
0.4
|
0.9
|
| Bakery |
£2,910
|
3.2
|
0.2
|
0.6
|
| Fresh Meat |
£3,421
|
1.0
|
0.1
|
-1.0
|
| Other Grocery |
£59
|
7.0
|
0.0
|
6.0
|
| Ambient |
£13,979
|
0.0
|
0.0
|
-0.8
|
| Produce |
£6,176
|
0.0
|
0.0
|
-2.4
|
| Fresh Fish |
£725
|
-1.9
|
0.0
|
-2.0
|
| Frozen |
£3,712
|
-5.9
|
-0.5
|
-7.4
|
| Non Food |
£24,252
|
5.7
|
1.8
|
3.9
|
| Other Non-Food |
£12,214
|
12.1
|
5.5
|
9.7
|
| Health & Beauty |
£7,334
|
1.8
|
0.5
|
-0.2
|
| Petcare |
£1,049
|
-1.0
|
0.0
|
-2.5
|
| Household |
£3,656
|
-3.7
|
-0.6
|
-5.9
|
Data used: 52 weeks to 1 January 2005
* % contribution is the weighted per cent change within each sector
Source: InfoScan TotalStore, Copyright © Information Resources, 2005. All rights reserved. InfoScan TotalStore tracks the sales of all goods sold in the following major retailers in Great Britain: Asda, Boots, Co-ops, Iceland, Safeway, Sainsbury’s, Somerfield / Kwik Save, Superdrug, Tesco and Waitrose.
Download the data table here
For more information please contact:
Rebecca Schanche
E-mail: supermarketreview@infores.com
Phone: +44 (0)1344 747859