The Olympics put a smile on the nation’s face and even the rain held off for the most part. Those factors came together in whatever the opposite is of a perfect storm (a sunny day, presumably) to help UK grocers notch up their best month in a long time.
Data from Nielsen today showed volumes were up 1.7% in the month to 18 August - the first such rise in a year and a half. The sun and sport weren’t the only factors, however. Nielsen identified the supermarkets’ heavy vouchering as key to the rise in sales.
“Although promotional activity has remained unchanged at 35% of FMCG sales,” mused Nielsen’s Mike Watkins, “the continual use of money-off vouchers and coupons has marked a differing approach by retailers this summer.
“This helped to increase shopping basket spends and, in return, given shoppers further savings at the checkout.” Watkins said the resurgent Tesco was particularly effective with a barrage of “very attractive offers”.
The picture was less rosy for Morrisons, which lagged the market average by a distance, posting sales up just 1.4% in the period. The pressure has been mounting on Dalton Philips for a while now - and is only likely to intensify later this week when the Bradford supermarket posts its interim figures. Analysts today said profits at the retailer could be down 2% for the six months to 31 July, to £434m. And broker Nomura reflected the pessimism by cutting its rating for the grocer’s stock from ‘buy’ to ‘neutral’.
Morrisons, for its part, spent the weekend banging the drum for its new deal on petrol, which offers discounts of up to 6% in exchange for buying gift cards at a host of retailers, not just Morrisons.
On the downside, the biggest discounts in the Fuel Saver scheme come with big-ticket purchases - which in itself could be a weakness in cash-conscious times. It’s fuel for thought ahead of Thursday’s crunch figures.
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