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Grocery sales growth fell in April as sales volumes dropped, despite a strong Easter with £3.1bn spent at the tills.
According to data from NIQ, total till grocery sales growth fell back from 11.7% in March to 9.7% in the last four weeks ending 22 April, with volumes down 3.8% year on year.
However, during the week ending 8 April, helped by sunny weather and the Easter weekend, shoppers were prepared to treat themselves. Shoppers spent a total of £3.1bn – the highest weekly spend this year – with value growth jumping 21% (against a non-Easter week in 2022).
Overall, sales of items on promotion at UK supermarkets rose to 23% in the last four weeks ending 22 April 2023, the highest level since December 2020, helped by the increased level of supermarket loyalty scheme discounts.
Most categories saw an increase in promotional spend – in particular 51% of branded beer, wines and spirit sales were bought on offer and 27% of own-label meat, fish & poultry, tempting shoppers to spend more for Easter.
According to NIQ, there was a 4.5% increase in visits to stores, although this is down from last month (7.1%).
With this in mind, the online share of fmcg spend dipped to 10.8%, down from 11.1% last month.
In terms of retailer performance, M&S (up 14.5%) continued to have strong momentum with seasonal ranges inspiring shoppers to spend on indulgent food for family events over Easter. The discounters Aldi and Lidl (up 23.6% and 21.6% respectively) also continued to be the fastest growing retailers, and all retailers were back in growth over the last 12 weeks.
Of the mults, Asda was the fastest grower at 10.4%, followed by Tesco and Sainsbury’s both at 9.7%. Morrisons sales edged up 0.2%.
Mike Watkins, NIQ’s UK head of retailer and business insight, said: “With food inflation hitting 15.7% in April and top-line growth falling back a little, this suggests some shoppers may have held back some spend before and after Easter to afford the Easter celebration.
“Inflation will continue to lift value growth, but the ongoing trend for shoppers to buy fewer items each trip is putting pressure on retailers to attract new shoppers and get more visits to drive overall sales. However, with summer fast approaching and the coronation this weekend, this could kick-start some incremental spend.
“The coronation will be an event to celebrate, and as we saw over the jubilee weekend, shoppers celebrated with fizz and teatime treats, so there could be a demand for similar products this year despite shoppers wanting to make savings. This means opportunities for premium own-label products that complement the occasion and meet the price point of consumers. Moreover, beers, wines and spirits could be a footfall driver as people look to commemorate and entertain.”
Morning update
Hotel Chocolat Group has appointed Stephen Alexander as the company’s new non-executive chair, effective 5 May 2023.
Alexander has held numerous chair roles of public and private equity-backed companies, predominantly in the consumer sector, for more than 20 years, including Dairy Crest, Immediate Media, Rhubarb Foods, EMI Group, Odeon Cinemas, AWAS Aircraft Leasing and Meridien Hotels.
Prior to this, he was CEO of Hillsdown Holdings, before which he spent 17 years at Allied Domecq, where he was CEO of both the food and retailing divisions, including 4,500 pubs and 9,000 fast food restaurants.
He is also currently an operating partner with private equity group OpCapita.
Coca-Cola HBC, the European Coke bottler, has posted double-digit growth in its first quarter, excluding its Ukraine and Russia regions.
First-quarter growth was 22.2%, with price mix-led revenue growth as the group took decisive actions to mitigate cost inflation.
Total organic net sales revenues were up 16.2%, with volumes down 4% and revenues per case up 21%.
Established market volumes performed better amid weaker price growth, with volumes up 6% and pricing up 13.8%. Emerging markets saw an 8.4% organic volume drop with pricing up 19.5%.
CCH said volume growth in sparkling, energy and coffee, offset by declines in stills, driven by an anticipated weakness in water.
Total group net sales growth of 24.4% was boosted by the consolidation of Egypt and Multon, which benefitted reported revenue growth by 8.8 percentage points.
CCH said its first quarter performance represented a “a good start to 2023”, led by execution of price increases and a robust volume performance across key markets and categories.
While being mindful of ongoing macroeconomic and geopolitical risks, it said it now has greater confidence in achieving positive organic EBIT growth in 2023.
Full-year organic revenue growth at a group level is expected to be above its 5% to 6% average target range.
A low-teens percent COGS/case increases in 2023 should still see it achieve the top end of its organic EBIT growth range of –3% to +3%.
CEO Zoran Bogdanović commented: “Consistent execution of our strategy has led to a good start to 2023 and we expect to deliver another year of strong performance. As a result, we now have greater confidence in achieving positive organic EBIT growth in 2023.
“Revenue growth was strong, thanks to our in-market agility and our tailored consumer and customer plans. Market shares improved for both non-alcoholic ready-to-drink and sparkling, while we effectively implemented thoughtful price and mix changes in the face of continued cost inflation. Although some markets have been impacted by a tougher consumer environment, our track record of successful revenue growth management and our sustained focus on investing in data-enhanced growth capabilities puts us in a strong position to adapt.”
Finally, consumer health group Haleon has posted a strong start to the year “demonstrating continued strength of portfolio”.
Its first-quarter revenues were up 13.7%, with organic growth of 9.9% driven by price growth of 7.1% and volume/mix growth of 2.8%.
It saw growth across all categories except VMS, which declined largely due to the strong comparative for Emergen-C in the US.
Performance was strong across geographies, with EMEA and LatAm and APAC growing double-digit, and mid-single-digit growth in North America.
It also posted increased operating profit in the quarter, driven by positive operational leverage.
Reported operating profit was up 34.5% to £627m, reflecting a large reduction in separation and admission costs.
Q1 adjusted operating profit was up 9.5% to £691m, up 3.3% constant currency, largely reflecting positive operational leverage which was partly offset by higher standalone costs and adverse transactional foreign exchange.
As a result, Q1 adjusted operating profit margin was 23.1%, down 90 bps (140 bps constant currency).
CEO Brian McNamara commented: “The new year has started well, and I am particularly pleased that we delivered a healthy balance of positive volume mix and price in the first quarter; demonstrating the strength of the brand portfolio combined with exceptional execution across our markets.
“Our strategy is delivering strong growth and our Q1 performance reinforces my confidence in our ability to deliver. Strong innovation and a continued focus on cost discipline underpins this confidence. As we shared at the AGM, for FY23 we expect to deliver towards the upper end of the 4%-6% organic revenue growth guidance range.
“Looking ahead, I remain excited on the potential of this business and the opportunities ahead, and confident that the quality of our portfolio, our strategy and disciplined capital allocation will enable Haleon to successfully deliver on all medium-term guidance.”
On the markets this morning, the FTSE 100 is up 0.5% to 7,810pts.
Risers include Nichols, up 1.9% to 1,050p, Greggs, up 1.4% to 2,886.7p and Coca-Cola HBC, up 1.3% to 2,464.5p.
Fallers include Haleon, down 3.9% to 339.3p, THG, down 2.3% to 114.3p and McBride, down 2.1% to 31.6p.
Yesterday in the City
The FTSE 100 started the week down 1.2% yesterday to 7,773pts.
Fallers included Nichols, down 4.6% to 1,030p, Ocado, down 2% to 495.2p, Kerry Group, down 1.9% to €94.00, British American Tobacco, down 1.5% to 2,883.5p, SSP Group, down 1.2% to 254.6p and Naked Wines, down 0.9% to 112.2p.
Yesterday’s risers included Hilton Food Group, up 5% to 712p, Sainsbury’s. up 2.5% to 283.4p, Domino’s Pizza Group, up 2.5% to 301.6p, AG Barr, up 2.4% to 515p, PZ Cussons, up 2.2% to 205p, Fever-Tree, up 1.6% to 1,378p and Glanbia, up 1.5% to €13.85.
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