Weather drives May grocery sales boost, offering opportunities for off-trade alcohol sector ahead of Euros and Olympics

By James Bayley

Published: 31 May, 2024

Weather has overtaken inflation as the primary driver of UK grocery sales growth in May, according to new data from NIQ. Total till sales at UK supermarkets grew by 3.3% for the four weeks ending 18 May 2024. This growth was fueled by shifts between wet and warm weather, which pushed value growth at supermarkets to 5.1%, a two-month high excluding Easter.

Ocado led retailer sales growth with a 12.4% increase over the last 12 weeks, while online orders across all channels rose by 4.1%. Store visits also increased by 2.8%, equating to an additional 14.3m households. Shoppers spent more on liquid refreshments, ice cream and food for alfresco dining to celebrate the warm weather.

The hot weather during the week ending 11 May lifted FMCG volume growth by 1.8% at major supermarkets. UK shoppers splurged on ice cream (+55%), cider (+32%), pre-mixed alcoholic drinks (+28%), and mineral water (+26%) as they enjoyed the sunshine.

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Store visits increased by 2.8%, adding 14.3m visits compared to last year. Despite fewer shoppers using online channels, those who did shopped more frequently, resulting in a 4.1% increase in online orders. Online FMCG spend improved slightly to 13%, up from 12.7% a year ago. The convenience channel also saw an uplift in FMCG spend (+3.9%).

Promotional spending remained unchanged over the last four weeks, with an average of 25% spend on promotion. Brands averaged 36% (up from 33% last year) and own-label items averaged 16% (up from 15% last year).

Retailer performance over the last 12 weeks was led by Ocado (+12.4%), followed by Sainsbury’s (+6%) and Tesco (+5.4%). Growth at M&S slowed to 7.6% due to high comparatives from last year. Discounters Aldi and Lidl also experienced slowing sales. Asda was the only retailer where sales declined compared to last year, although there were more visits per shopper and increased footfall, helped by the new Asda Express convenience stores.

Mike Watkins, NIQ’s UK head of retailer and business insight, said: “The warm weather drove shopper spending at UK supermarkets more than food inflation, which is expected to remain around 3% for the next few months. Despite this, many shoppers still face limits to their discretionary spend, impacting certain categories. Retailers must focus on driving food and drink sales.”

With the UEFA Euro 2024 football tournament and the Olympics on the horizon, there are significant opportunities for the off-trade alcohol sector. Watkins highlighted that 45% of UK households are interested in Euro 2024, with 69% planning to watch the matches at home. This could boost supermarket sales of drinks for event-driven categories like barbecues.

Watkins concluded: “Given the positive response to a week of sunny weather in May, retailers and suppliers must remain agile, with relevant promotions and good availability, to capitalise on the summer sports season.”

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