Bracknell, July 12, 2006 – IRI (Information Resources, Inc.), today announced that overall sales in the first quarter of 2006 were up by 2.5% through the major supermarkets and health and beauty retailers.
Both grocery and non-food are in growth for the full year. Grocery is being driven by strong sales in produce, fresh fish and beers, wines and spirits, while all categories in non-food have shown sales increases. Compared to the figures for the same 12-week period in 2005 non-food has the strongest growth, 4.4%, while grocery has seen only a marginal 0.3% increase in sales.
With high-street retail sales slow in the first quarter of the year it seems that the supermarkets have benefited from consumer worries over rising interest rates and recovery from Christmas expenditure. With increases in sales it looks like shoppers are choosing to spend their available cash in supermarkets where they can make their money go that bit further, both on food and the ever expanding non-food ranges.
Trends by category
Within produce, vegetables and nuts and dried fruit are the biggest selling items. Vegetables continue to benefit from ‘healthy’ and ‘5-a-day’ messages from the government, press and supermarkets. Consumers are also trading up more frequently as positive perceptions of organic produce take hold and shape shoppers buying habits.
Cider and perry are leading the way in beers, wines and spirits. Growth is up 6.5% over the full year with new launches and premium products increasing value. Alcopop type products are still losing popularity and sales; the sector enjoyed huge success a few years ago but as existing consumers mature and leave it is struggling to attract new buyers.
In chilled, fruit juice has seen the biggest increase in sales, up 18.3% compared to the same 12-weeks in 2005. The smoothie sector is driving this growth with consumers prepared to pay a premium for an easy and convenient way to increase their fruit intake. Milk is up 9.6% on the previous year, however this is mainly due to price rises. If we take out the inflationary influence of milk then the chilled market is actually slightly down in value year on year.
Crisps, snacks and confectionery are losing sales in ambient. Pricing and dealing have driven down value, as well as the threat of obesity and unhealthy food leading many consumers to revaluate their eating habits and cut out the perceived ‘bad’ products.
Canned fish is in growth year-on-year as it continues to benefit from the popularity of Omega-3, with oil rich fish, such as salmon, sardines and pilchards, doing particularly well. The largest category, Tuna, has benefited year on year from rising prices (driven by availability), however over the last few months price paid has drifted down slightly leading to a marginal decline of -0.2% in the first quarter of 2006.
Fresh fish is again showing growth, with sales up 14.6% year on year. The category is going from strength to strength as new fish varieties become available and consumers continue to enjoy the health benefits on offer. One interesting point to note is that while fish is doing well, sales of frozen chips are in decline, indicating that consumers are moving away from traditional ‘fish and chips’ and instead substituting healthier potato or vegetable accompaniments.
Fresh meat is in decline, down -0.8% for the full year and the quarter. Poultry sales have seen the biggest drop over the quarter indicating that there are still concerns over Bird Flu. Lamb and pork have also seen a decline with only beef and other meats showing an increase in sales.
The frozen market is still performing poorly with sales down -9.1% compared to the same 12-weeks in 2005. This loss is, in part, due to the plethora of offers available at any one time which ultimately end up eroding category value. Promotions in frozen frequently steal from full price purchases rather than growing the category, leading to an accelerated decline. Despite this manufacturers are trying to add value back into the category with refreshed product ranges, innovation and increased emphasis on the health benefits and freshness of frozen fruit and vegetables.
Other non-food continues as the shining star in non-food, with books, electrical items, clothing, seasonal goods and computer games all doing well. Recent surveys suggest that supermarkets now provide not only better value and more promotions than the high street, but better quality, customer service and advice. It is also a much easier way to shop without the hassle of parking or visiting lots of different shops. In today’s market value and convenience are key, and with growth of 7.1% year on year it seems the supermarkets are winning on both counts.
Health and beauty continues to grow with male grooming and baby food leading the way. Male grooming has, however, seen a -7.3% drop in sales compared to the same quarter of 2005. As men’s hairstyles change so do their requirements for styling products. In 2006 longer length styles have made a come back so, with less styling products needed, it looks like the market may suffer for a while.
In petcare trends for greater convenience and premium recipe dog and cat food are adding value to the category. Single-serve, ‘luxury’ foods and complete meal solutions are becoming popular with shoppers and sell at higher prices than traditional tinned alternatives.
Background data
| |
52 Weeks to end Apr 2006
|
12 wks to Apr 2006
|
| |
Value Sales
(m)
|
% change
|
% contribution*
|
% change
|
| Total Sales |
£81,647
|
2.5
|
|
1.3
|
| Grocery |
£54,187
|
1.2
|
0.8
|
0.3
|
| Produce |
£7,028
|
4.4
|
0.5
|
2.3
|
| Beers, Wines & Spirits |
£7,085
|
2.1
|
0.3
|
-1.3
|
| Chilled |
£13,071
|
0.9
|
0.2
|
1.6
|
| Ambient |
£15,273
|
0.8
|
0.2
|
-0.5
|
| Fresh Fish |
£952
|
14.6
|
0.2
|
15.8
|
| Other Grocery |
£310
|
27.2
|
0.1
|
25.7
|
| Bakery |
£3,098
|
1.3
|
0.1
|
3.6
|
| Fresh Meat |
£3,681
|
-0.8
|
-0.1
|
-0.8
|
| Frozen |
£3,690
|
-6.3
|
-0.5
|
-9.1
|
| Non Food |
£27,186
|
5.0
|
1.6
|
4.4
|
| Other Non-Food |
£14,134
|
7.1
|
3.5
|
3.9
|
| Health & Beauty |
£7,869
|
3.4
|
0.9
|
4.5
|
| Petcare |
£1,196
|
4.1
|
0.2
|
5.2
|
| Household |
£3,987
|
1.1
|
0.2
|
5.5
|
Data used: 52 weeks to 1 April 2006
* % contribution is the weighted per cent change within each sector
Please note the definition of data used in this report has been changed and now includes Morrisons data.
Copyright © Information Resources, 2006. All rights reserved. Data in this report tracks the sales of all goods sold in the following major retailers in Great Britain: Asda, Boots, Co-ops, Iceland, Morrisons, Safeway, Sainsbury’s, Somerfield / Kwik Save, Superdrug, Tesco and Waitrose.
Download the full report here
For more information please contact:
Rebecca Schanche
E-mail: supermarketreview@infores.com
Phone: +44 (0)1344 747859