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Own-label and discounters fuel supermarket sector return to growth

Published:  20 August, 2019

Supermarket sales have recovered from a poor July to post 1% growth in the last four weeks, according to new data from Nielsen.

Sales for July fell 0.5% year-on-year.

Particular growth has come from own-label products, with volumes up 3% – worth £85m – compared to the same period in 2018. Within own label, there was strong growth for frozen foods, canned and packaged grocery items, and bakery products, which rose 7%, 6% and 5% respectively. Branded goods fell 2% by volume.

Despite the overall growth, sales are still disappointing compared to the same period in 2018, which saw 4.2% growth.

Among the major multiples, both Sainsbury’s and Marks & Spencer grew sales over the last four weeks, with the former up 1.3% and the latter 1.4%

However, sales for the 12 weeks to 10 August all showed contractions at the traditional big grocers, with Morrisons down 2.4% year-on-year, and Tesco down 1.7%, making them the main losers.

The discounters continue to take market share, with Lidl up 12.1% and Aldi up 9.5%, with the latter now claiming the same market share as Morrisons at 9.5%.

Iceland posted growth of 1.8% for the twelve-week period.

Mike Watkins, UK head of retailer and business insight, said: “We’re starting to see shopping behaviour return to normal with the increase in own-label purchasing given their lower price points, whereas last year shoppers bought more branded products thanks to heavy promotions tied to the big event of summer 2018.

“It is promising to see that the grocery market has started to recover from the low growth which has been a consistent theme since Easter.

“Current value growth is still not in line with inflation, which the latest Consumer Price Index pegged at 2.1%.”