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Uksupermarkets

Supermarket sales in the United Kingdom grew at their fastest rate in three years, thanks in part to higher prices for fresh seafood and produce, new data shows.

Grocery sales soared 2.3 percent for the quarter ending 26 February, according to Kantar Worldpanel, a consumer research firm. Prices for wet/smoked fish rose 8.8 percent for the 12 weeks ending 26 February, while frozen fish prices rose 2.9 percent.

"The recent prices rises are due to the weakened pound and fluctuations in currency, as well as a rise in diseases affecting fish, such as sea lice," Kantar Worldpanel said in a statement provided to SeafoodSource.

Like-for-like inflation also reached 1.4 percent during the past 12 weeks, with price rises across staples such as butter, tea and fish, the research firm said.

“Staples such as butter, tea and fish all saw prices rise by more than five percent during the past 12 weeks, as fruit and vegetables – many of which are imported – also saw an uptick in price,” said Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, “However, it’s important to point out that inflation is still far from universal, with prices actually falling across a number of categories, including crisps, bacon and eggs.”

While consumers may be starting to feel a “very slight pinch,” the increased inflation has produced overall market growth, according to McKevitt. Simultaneously, combined sales at the U.K.’s four largest supermarkets increased by 0.5 percent year-on-year.

“This is a timely reminder that, despite the huge interest in the discounters during recent years, the big four remain a force to be reckoned with: they still hold just over 70 percent of the market, with almost 99 percent of the population shopping in a Tesco, Sainsbury’s, Asda or Morrisons during the latest quarter,” McKevitt said.

However, Lidl became Britain’s fastest growing grocery chain in the quarter, when sales spiked 13 percent. Aldi also increased sales by 12.9 percent, snaring a record market share of 6.3 percent. And Iceland’s sales rose 8.8 percent. Meanwhile, Morrisons realized a sales increase of 2.6 percent, the retailer’s fastest growth in five years.

“Holding market share steady year on year at 10.6 percent, the retailer’s positive brick-and-mortar performance was buoyed further by the continued rapid expansion of its e-commerce business,” Kantar Worldpanel said in a statement.

Tesco also increased sales for the sixth period in a row – a run it hasn’t experienced since January, 2014. However, the grocer’s market share slipped by 0.5 percentage points to 27.9 percent. Asda was the only retailer to see sales fall during the past 12 weeks, “but a decline of just 0.8 percent represents a significant improvement and is the grocer’s best performance since November, 2014,” Kantar Worldpanel said.

Sainsbury’s returned to growth for the first time since March last year, with sales up by 0.3 percent. At the same time, its market share slipped by 0.3 percentage points, with 16.5 percent of the total grocery market.

While U.K. shoppers generally moved away from multi-buy promotions, meal deals remain popular – particularly around Valentine’s Day.

“Premium meal deals, which offer dinner for two at a price point of GBP 10 (USD 12.20, EUR 11.54) or above, were bought by nearly two million consumers in February, as Valentine’s Day offered a welcome opportunity to splash out,” McKevitt said.

“In fact, British diners spent GBP 9 million (USD 11 million, EUR 10.4 million) more on premium meal deals than during the same period last year, suggesting that celebrating special occasions at home is an increasingly appealing option,” McKevitt said.

MadelynKearns

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Associate Editor
mkearns@divcom.com
CliffWhite

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cwhite@divcom.com

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