Falling food inflation meant growth across the major multiples has slowed to its lowest level since 2007, according to new data from Nielsen.
While sales for the four weeks to 31 October were up 4.2% against last year, that represents the slowest rate of growth since two summers ago.
“This is a similar trend to that which we saw last year but this time it is due to falling food inflation rather than the shock of recession,” said Mike Watkins, senior manager of retailer services at Nielsen.
“With like-for-like growths running at 2% the grocery multiples are going to become more reliant on sales growths from new store openings now that inflation has eased.”
Waitrose and Morrisons both outperformed the market, however, notching up growth of 11.7% and 8.4% respectively in the past month.
“It’s no coincidence they are the two retailers to benefit most from acquisitions this year,” said Watkins. “Waitrose now has 10% of all British households visiting every four weeks – a third of a million new households – and Morrisons have attracted almost 650,000 new households to store compared to this time last year.”
He added: “Morrisons’ sales look set to accelerate further in the coming six weeks and if so, then history could repeat itself with a third successive Christmas of stellar sales growths for the retailer. But it’s getting more and more competitive with Tesco, Sainsbury’s and Morrisons all offering shoppers either double points, coupons or vouchers to remain loyal this Christmas.“
Meanwhile, TNS data suggested Tesco had upped its market share for the first time in two years, growing to 30.7% for the three months to November. Morrisons grew its share to 11.7%, while Waitrose now holds 4% of the UK grocery market.
Retail Prices: Retailers revert to type as economy starts to perk up (7 November 2009)
Sainsbury’s sales growth slows (7 October 2009)