Bracknell - November 3, 2004 - IRI (Information Resources) today announced that overall value sales in the third quarter of 2004 were up by just 1.3% through the major supermarkets and health and beauty retailers.
Growth has been dragged down by the atypical fall in grocery sales of 0.2%. This is the first time since IRI began its Supermarket Review report in 2001 that grocery sales have experienced a year-on-year decline.
It seems that falling consumer confidence and rising interest rates may at last be taking their toll on the grocery market, although heated price wars and a period of cool weather could also have had an effect.
Non-food sales continue to show good growth. This has been driven by the ‘other non-food’ sector, which includes items such as clothes, electrical items and music. With double digit growth in both the quarter and the full year, this sector now accounts for almost half the value of the whole non-food sector.
Trends by category
Chilled foods continue to contribute most to grocery sales although growth has cooled off this quarter to 1.8%. Ready meals still dominate chilled growth although cooked meats and cheese remain the largest chilled categories.
Growth in beers, wines and spirits has deflated to 1.7% this quarter. The ‘other beers, wines and spirits’ category pulled growth down with a decline of 22% in the quarter as the ready-to-drink sector continues to suffer from maturity. Beer also saw a decline this quarter with reports suggesting that the increasing amount of alcohol drunk by women, who tend to favour wine over beer, has had an affect.
The value of produce sales has suffered this quarter with sales down by 0.7%. However, this has only really been driven by salad vegetables, the price of which was generally higher last year after crops were affected by the hot weather.
The decline in ambient sales has been driven by soft drinks, which topped the list of growth contributors in quarter two of 2004. It’s hard to tell if this is due to increasing concerns over obesity as soft drinks also includes healthier options such as fruit juice and bottled water, and although the biscuits and crisps, snacks and nuts categories are in decline, confectionery remains in growth.
Declining sales in frozen food endure with all categories experiencing negative growth this quarter. The ice cream and desserts category was the biggest loser, not surprisingly as sales are being compared to a good spell of weather, and therefore sales, at the same time last year.
The ‘other non-food’ sector continues to drive growth in non-food sales. Within this sector the miscellaneous non-food category is driving growth and has now outsold tobacco for the first time. Price wars between retailers may have been responsible for the surprise downturn this quarter in electrical goods, music and video and DVDs. Lottery sales, however, have recovered with sales up by 15%.
Health and beauty sales have been driven by healthcare as consumers become ever more willing to pick up such items along with their groceries. Despite the growing popularity of self-tanning products, suncare sales were another casualty of the cooler weather conditions this summer.
Petcare declined in the quarter driven by sales of pet food. Value for both cat and dog food waned, but sales of food for other animals were up by almost 9%. Although still a small sector this reflects the trend that supermarkets are increasing their ranges into areas more commonly serviced by specialist pet stores.
Sales in the household category continue to decline as value sales diminished in all categories in quarter three. The drop was mainly due to sales in detergents and laundry. Within this area, washing up liquid experienced a double digit decline, probably at the expense of the growing dishwasher products category as ownership of dishwashers increases.
Background Data
| |
52 Weeks to end September 2005
|
12 wks to Sept 2005
|
| |
Value Sales
(m)
|
% change
|
% contribution*
|
% change
|
| Total Sales |
£73,715
|
3.8
|
|
1.3
|
| Grocery |
£49,718
|
2.6
|
1.7
|
-0.2
|
| Chilled |
£12,078
|
5.2
|
1.2
|
1.8
|
| Beers, Wines & Spirits |
£6,430
|
4.5
|
0.6
|
1.7
|
| Produce |
£6,226
|
2.7
|
0.3
|
-0.7
|
| Ambient |
£14,044
|
1.2
|
0.3
|
-1.0
|
| Bakery |
£2,913
|
4.4
|
0.2
|
3.1
|
| Fresh Meat |
£3,445
|
2.6
|
0.2
|
0.6
|
| Fresh Fish |
£732
|
1.6
|
0.0
|
-1.8
|
| Other Grocery |
£57
|
9.5
|
0.0
|
4.9
|
| Frozen |
£3,792
|
-4.2
|
-0.3
|
-8.3
|
| Non Food |
£24,021
|
6.8
|
2.1
|
5.0
|
| Other Non-Food |
£11,897
|
12.6
|
5.5
|
11.8
|
| Health & Beauty |
£7,344
|
3.8
|
1.1
|
1.3
|
| Petcare |
£1,058
|
0.3
|
0.0
|
-0.7
|
| Household |
£3,722
|
-1.7
|
-0.3
|
-4.9
|
Data used: 52 weeks to 2 October 2004
* % contribution is the weighted per cent change within each sector
Source: InfoScan TotalStore, Copyright © Information Resources, 2004. 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.
For more information please contact:
Rebecca Schanche
E-mail: supermarketreview@infores.com
Phone: +44 (0)1344 747859