Bracknell, February 6, 2007 – IRI (Information Resources, Inc.), today announced that overall sales in the final quarter of 2006 grew by 3.8%, through the major supermarkets and health and beauty retailers. Non-food led the way with growth of 4.5% but grocery was not far behind with a 3.4% increase on the same quarter of 2005.
Although total non-food growth was behind the full year figure of 5.1% all sectors performed well over the quarter. Mild weather in October and November had an impact on sales of clothing and footwear. Sales did pick up thanks to a cold snap just before Christmas but by this time many retailers had already started their sales.
In grocery, the top performing categories were produce (+9.9%); fresh fish (+7.7%) and fresh meat (+5.7%). The only sector to show a decline in sales was frozen food, not surprising given the erroneous perception among consumers that frozen food is unhealthy, coupled with a shift to fresh goods.
Supermarkets attempted to drive footfall in the run up to Christmas with extensive price cutting on beer and seasonal confectionery. Sales of premium products such as smoked salmon and champagne helped boost takings as consumers decided to treat themselves over the festive period.
Trends by category
Sales in chilled were up 4.1% on 2005. Milk, yoghurt drinks, chilled juices and smoothies all contributed this growth, although the increase in value in milk is largely due to price rises. New launches and increased advertising have helped boost sales of ‘functional’ yoghurt dinks. Consumers are attracted to the fact that they can be consumed on the go but also have additional health benefits. The traditional yoghurt ‘pot’ is still popular with growth coming from functional line extensions and new organic ranges.
Produce was another strong performer with sales up 6.7% for the full year and 9.9% compared to the same period of 2005. All categories showed good sales increases with fresh and salad vegetables leading the way. In response to healthy eating concerns supermarkets have taken the reigns and are actively promoting fresh fruit and vegetable in store. Organic ranges have widened their shelf presence and, with premium prices, are adding to the increase in sales.
Speciality foods, including halal, kosher and international ranges, saw strong growth in ambient. While the size of the category is relatively small, value sales have increased by over 10% for the year. With the EU opening up the UK now has to cater for an even wider range of tastes and supermarkets are quickly tapping into these new markets.
Canned meats, soups and fruit all saw a decline in sales over the full year. Again this can be attributed to dietary and health concerns with consumers opting for fresh above frozen or canned alternatives. Mixed food gift sets did well with sales up significantly on the same period in 2006. Endorsements from celebrity chefs and the inclusion of various gadgets and specialist products made them ideal Christmas gifts.
Sales of beers, wines and spirits were up marginally for the whole year, but deep price cutting in the run up to Christmas meant sales remained static compared to the same quarter of 2005. Retailers selected beer as their weapon of choice in the annual price war with the cost of lager falling to as little as 11p per 100ml - roughly the same as bottled water – in some stores.
The increased popularity of champagne, sparkling wine and lower alcohol, rosé wine helped to push a small increase in overall wine sales, but this increase has been suppressed by discounting over the Christmas period.
Sales of fresh meat were up 5.7% on the final 12 weeks of 2005. Poultry sales increased marginally over the whole year but showed a significant jump compared to Christmas of the previous year. Over the years the turkey has fallen out of favour and cooks have opted to serve up alternative meats and fish instead. However in 2006 it seemed to be back on the table thanks to the re-introduction of traditional, premium turkey varieties in the retailers, and a plethora of cookery programmes demonstrating how to create the perfect roast turkey!
Health and beauty sold well over the Christmas period (+5.9%) and outstripped the full year figure of 5.5%, as shoppers used their festive shopping trips to stock up on personal care products. The launch of the Gillette Fusion razor in August added value to razors & blades. It was the biggest ever launch into the category and entered at a premium price. In-store advertising was chosen to support the launch rather than discounting to ensure maximum value was driven back into the sector.
In baby, staples such as nappies and baby milk suffered a slump but this was offset by increases in baby finger food, organics and healthcare.
Air fresheners have shown rapid growth in household over the last 12 months, this is largely due to strong performance and new launches within the electrical sector.
Petcare has continued to increase sales with a 4.7% increase over the full year. Pet non-food sales increased over the final quarter as owners treated their pets to Christmas presents! In other pet care growth in small animal and wild bird food have contributed to value sales.
Background data
| | 52 Weeks to 30 December 2006 | 12 wks to 30 Dec 2006 |
| | Value Sales
(m) | % change | % contribution* | % change |
| Total Sales | £84,743 | 3.8 | | 3.8 |
| Grocery | £56,393 | 3.6 | 2.3 | 3.4 |
| Chilled | £13,602 | 4.1 | 1.0 | 4.4 |
| Produce | £7,478 | 6.7 | 0.8 | 9.9 |
| Ambient | £15,691 | 2.4 | 0.6 | 2.2 |
| Bakery | £3,438 | 6.1 | 0.4 | 4.5 |
| Beers, Wines & Spirits | £7,255 | 1.9 | 0.2 | 0.0 |
| Fresh Meat | £3,809 | 2.9 | 0.2 | 5.7 |
| Fresh Fish | £1,022 | 11.2 | 0.2 | 7.7 |
| Other Grocery | £333 | 12.1 | 0.1 | -3.0 |
| Frozen | £3,765 | -0.3 | -0.2 | -1.1 |
| Non Food | £28,340 | 5.1 | 1.6 | 4.5 |
| Other Non-Food | £14,672 | 4.6 | 2.3 | 3.7 |
| Health & Beauty | £8,235 | 5.5 | 1.5 | 5.9 |
| Household | £4,191 | 6.1 | 0.8 | 5.1 |
| Petcare | £1,241 | 4.7 | 0.2 | 4.0 |
Data used: 52 weeks to 30 December 2006
* % contribution is the weighted per cent change within each sector
Copyright © Information Resources, 2007. 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 Eyles
E-mail: supermarketreview@infores.com
Phone: +44 (0)1344 747859