Bracknell - April 26, 2004 - Information Resources, Bracknell, today announced that overall sales for the first quarter of 2004 were up by 4.8% through the major supermarket and health and beauty retailers. This compares with 2.9% growth in the same period in 2003. Growth figures for the latest 12 months are slightly lower than those reported at the end of December of 5.5%.
These figures are encouraging given the uncertainty in the industry concerning the future of Safeway and the rumours of a new price war between the other retailers as they fight back against their newly enlarged competitor. Only recently Tesco announced two rounds of price cuts totalling £140m. Prices at Safeway have also been trimmed by their new owner, Morrisons. In the beginning of April, The Grocer reported that Safeway customers are now paying up to 24% less per basket for their shopping.
However, it is perhaps little surprise that growth has surpassed last year’s level as recent reports suggest consumer confidence has continued to rise while unemployment has fallen to its lowest level in 20 years which has fuelled spending. Credit card spending also hit an all time high this quarter as consumers took advantage of the seasonal sales.
Trends by sector
Chilled food continues to drive grocery sales with growth in the last three months almost three times that of the largest sector, ambient. Although cooked meats is the biggest chilled category, growth continues to be driven by the unrelenting ready meals category.
Total grocery sales have been hindered by poor performance in the frozen category where sales continue to decline year on year. This is possibly due in part to the sustained growth in chilled foods which may have cannibalised sales from frozen food.
Confectionery topped the ambient category in terms of contribution to sales growth, with growth of 12.7%, despite Easter falling outside this time period. Retailers seem to be stocking Easter eggs earlier each year and many of us were prepared enough to buy our Easter gifts early. The only other ambient category to achieve double digit growth in the quarter was eggs, boosted perhaps by Pancake Day in February.
The healthier eating message may at last be sinking in as soft drinks, biscuits, and crisps and snacks categories all experienced declining sales in the last three months. In addition, sales in all categories in the fresh produce category were all up, boosted by salad vegetables sales in particular.
Overall sales in the beers, wines and spirits category continue to grow despite the much-reported dangers of the binge-drinking culture prevalent in the UK, and the continuing declines in the vermouths and aperitifs, fortified wines and ‘other beers, wines and spirits’ categories. The latter has continued to decline perhaps due to the maturing alcopops market becoming saturated with an almost infinite array of flavours now available.
Growth in the other non-food sector looks set to continue with sales now worth almost as much as chilled food. Reflecting the increasingly varied ranges supermarkets are prepared to stock, the miscellaneous non-food category contributed most to the overall growth. This category also includes clothing which continues to go from strength to strength.
The video and DVD category saw the biggest increase in the quarter with sales up by over 37% compared to the same period last year. This is encouraging as sales in the run up to Christmas were down compared to 2002. Electrical goods, which include DVD players, also performed well with sales up by over 28%. Recent research from the Office of National Statistics has estimated that one in three households now own a DVD player.
The most notable increase in sales is that of the lottery which increased by almost 20% in the last three months. Lottery sales through these retailers have been declining for the last few years. Recent National Lottery development such as the introduction of a Euro Lottery and new online capabilities for buying tickets and claiming prizes may have helped boost sales.
All categories in health and beauty achieved good growth with healthcare showing the biggest growth in the quarter perhaps reflecting the increase in the number of seasonal winter ailments such as colds and flu over this time period.
The household sector, although showing good growth for the year, declined in the quarter. The main cause of this was a decline in facial tissue sales under the household paper category.
Background data
| |
52 Weeks to end March 2004
|
12 wks to Mar 2004
|
| |
Value Sales
(m)
|
% change
|
% contribution*
|
% change
|
| Total Sales |
£73,035
|
5.6
|
|
4.8
|
| Grocery |
£49,615
|
4.9
|
|
3.7
|
| Chilled |
£11,883
|
6.8
|
1.5
|
6.1
|
| Ambient |
£14,097
|
3.7
|
1.0
|
2.1
|
| Beers, Wines & Spirits |
£6,332
|
6.9
|
0.8
|
6.5
|
| Produce |
£6,277
|
6.6
|
0.8
|
4.9
|
| Fresh Meat |
£3,434
|
4.6
|
0.3
|
3.5
|
| Bakery |
£2,861
|
3.5
|
0.2
|
4.9
|
| Fresh Fish |
£748
|
9.5
|
0.1
|
-3.3
|
| Other Grocery |
£57
|
19.6
|
0.0
|
20.8
|
| Frozen |
£3,926
|
-1.2
|
-0.1
|
-3.0
|
| Non Food |
£23,393
|
7.6
|
|
7.5
|
| Other Non-Food |
£11,237
|
11.5
|
5.0
|
14.3
|
| Health & Beauty |
£7,287
|
5.7
|
1.7
|
3.7
|
| Household |
£3,807
|
2.4
|
0.4
|
-1.0
|
| Petcare |
£1,063
|
1.8
|
0.1
|
-0.3
|
Data used: 52 weeks to 3 April 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