Supermarkets can expect another boost to sales from this week’s extreme high temperatures, after May’s heatwave drove an uplift, according to analytics company NIQ.
Total till sales at UK supermarkets rose by 4.6% year on year in the four weeks ending 13 June, “primarily driven by” the heatwave in the last two weeks of May, in which the mults saw a 6.3% uplift.
“The arrival of hot weather boosted demand for summer essentials, with suncare, ice cream and refreshment-related categories among the fastest-growing areas of grocery spend,” said Mike Watkins, NIQ head of head of retailer and business insight.
“Looking ahead, the second heatwave of the year will likely see another boost to sales into July, conveniently coinciding with the summer of sport.”
However, the growth slowed sharply in the two weeks to 13 June, to just 0.4%, while volumes fell by 1.7%, as cooler and wetter weather discouraged spending. Shoppers spent £490m less during these two weeks compared with the previous fortnight, reflecting underlying weaker consumer confidence, according to NIQ.
Across the four weeks, promotional activity played a key role. Spending on promotions rose to 25% of total fmcg sales, up from 23.5% last year, boosted by retailer activity around the World Cup. Promotional spend online was even higher, accounting for 29% of the total.
Own label sales were up 5.4% in value and 0.3% in volume, growing three times faster than branded sales. The own-label growth came mostly from premium lines, which were up by 9.1% in value and 6.2% in volume.
Convenience did well from the start of the World Cup, particularly stores operated by the mults, whose sales were up by 3.6%. Wider convenience grew sales by 1.7%.
Warmer weather drove strong growth in outdoor and summer-led products, including suncare (+70%), prepared salad (+21% value) and fresh dips (+20% value). There was also growth in fresh foods (+4.4%), while frozen (+9.4%) became the fastest-growing ‘super category’, driven by ice cream (+34%) and frozen fruit (+28%), with total spend reaching £252m.
The impact of the World Cup was also reflected in the demand for new cuisines and world flavours, according to NIQ. Interest was particularly strong in Japanese (+9.0%), Thai & South East Asian (+14.8%), Spanish (+31.2%) and Mexican (+7.1%) flavours. In contrast, unit growth across more mainstream cuisines declined, with British down 0.9% and Indian falling back 2.4%.
Among retailers, Asda suffered an alarming 4.9% year-on-year slide in sales in the 12 weeks to 13 June, knocking its share of the market back from 11.6% to 10.7%. Aldi was the second-weakest performer for growth – a pattern also shown in Worldpanel data this morning. The discounter’s sales were flat at 0.0%, while its market share slid from 10.4% to 10.1%.
Watkins said that after the current heatwave bump, “we still expect lower demand into August when the holiday season disrupts spending”.
“The economic outlook for September is still uncertain with increases in mortgage and energy costs expected and the possibility that accelerating food inflation could start to take a bigger share of disposable incomes, which may add further uncertainty for households,” he added.
“Retailers and brands will therefore need to continue to find innovative ways to encourage shoppers to spend to maintain the current sales momentum.”
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