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The latest grocery share figures from Kantar Worldpanel for the 12 weeks ending 14 August 2016, show the market growing at 0.3% as an upturn in the weather spurred consumers into increasing their spend.
This is the fastest acceleration for the overall market since March 2016.
Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “The sun’s eventual appearance was a welcome boost to the market after a delayed start to the summer. Frozen confectionery sales grew by 23% in the last month, while chilled drinks increased by 10%. At Iceland ice cream was the fastest growing category, helping it to an overall 4.3% increase in sales on last year. Meanwhile, price cuts such as the ‘7 Day Deals’ and summer loyalty promotions helped bring an additional 129,000 shoppers through Iceland’s doors.”
Promotional sales dropped to their lowest level since September 2010 as the major retailers continue to move towards more simple pricing models.
Fraser McKevitt comments: “Only 37.7% of grocery sales were bought on any kind of promotion this period – a significant decrease from highs of over 40% we were seeing in 2015. Fewer promotions doesn’t mean consumers are paying more for their shopping but does reflect the renewed focus on own-label lines which is visible across the market. Shoppers are clearly responding to the better value offered through own label rather than money off, with own brand goods growing at both ends of the price spectrum: premium retailer brands are up by 9% and value lines up by 2%.”
There remains no evidence of Brexit-fuelled inflation causing food prices to rise. In fact, grocery price inflation remains negative, with a representative basket of goods 1.3% cheaper than it was last year.
Once again Lidl is the fastest growing supermarket, with sales up 12.2%. The retailer witnessed strongest growth in its key produce, dairy and chilled aisles, increasing its share by 0.4 percentage points on last year to 4.5% of the market. Sales at Aldi rose by 10.4%, with share up by 0.6 percentage points to 6.2%. Both discounters benefitted from rising premium own label sales and forward planning by having their back to school ranges in store just as schools were breaking up.
Tesco’s sales fell by 0.4%, the slowest rate of decline in six months. Fraser McKevitt comments: “Current trends suggest the retailer may return to growth this year, which would mark the end of a decline stretching back to March 2015. Tesco’s recent product launches have been making a positive impact on its performance, with its ‘Farm brands’ finding their way into over a quarter of the Tesco baskets this period.”
Sales at Co-op rose by 2.8% compared to last year, taking its market share to 6.6% – the highest achieved since 2012. Shoppers have heeded Co-op’s call to shop little and often with this growth primarily coming from an increased number of trips to the retailer.
Sales declined at Sainsbury’s by 0.6% and at Morrisons they fell by 1.8%, leaving the retailers with a 16.1% and 10.6% share of the market respectively. Asda’s decline of 5.5% remains unchanged from last month, with share falling by 0.9 percentage points to 15.7%. Waitrose sales rose by 1.4% with market share remaining at 5.1%.
Many Millennials Shun Practice of Eating Three Regular Meals a Day
Over a third of consumers globally say they snack regularly, with the figure rising to just over 40% for young people aged 18-34, as the practice of modular eating becomes more accepted as an alternative to eating three main meals a day, according to consumer insight firm Canadean.
The company’s latest report finds that consumers snack for a variety of reasons such as the functional need for an energy or nutritional boost, the psychological need to de-stress or indulge, and needs dictated by occasion, such as watching a movie, attending a sporting event, or socializing with friends.
As more consumers turn to snacks to fulfill a wide range of needs and occasions every day, the potential opportunities for snacking brands are enormous right across the health-indulgence and sweet-savory spectrums.
Katrina Diamonon, Principal Consumer Insight at Canadean, explains: “While it is important for brands to acknowledge and address the snacking needs of all consumers, it is particularly crucial to understand the motivations of younger consumers. Not only are they more frequent snackers, but their purchase behaviors and preferences will strongly influence other current consumers and also subsequent generations as they pass on these traits to their children.”
Canadean finds that a range of rational and emotional needs beside hunger can be addressed through snacking, and these reasons differ according to age. As millennials tend to prioritize meat in their diets more highly than their older counterparts due to its perceived health benefits, manufacturers should capitalize on the meat snack segment and explore new opportunities.
Diamonon continues: “Manufacturers are increasingly experimenting with a range of proteins, formats, and gourmet flavors to elevate consumption from convenience-store snacks to an exciting taste experience and even credible meal replacement. Improved sourcing transparency and ethical production of such offerings is also enhancing premium credentials.”
Grocery Market Fails To Feel Impact Of Brexit On Prices Or Volume Sales
The latest grocery share figures from Kantar Worldpanel for the 12 weeks ending 17 July 2016, show slow growth for the supermarket sector, with sales up 0.1% compared to last year.
Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, comments: “The EU referendum result has had no immediate impact on the prices retailers are charging or the sales volumes consumers are buying over the past 12 weeks. The nation’s average shopping basket is 1.4% cheaper than a year ago, exactly the same level of deflation as reported last month, and it remains to be seen if the Brexit vote will bring about any price rises this year.
“Over the latest 12 weeks beer sales did bring about some cheer for the grocers, growing 2.8%, ahead of the overall market. The impact was mostly felt prior to England’s early exit from the Euro 2016 football tournament, which brought with it a rapid reversal in fortune for beer sales. Beer and lager were also hindered by poor early summer weather, as were barbeque favourites like sausages, which fell by 6.3%.”
Among the individual retailers, sales at Tesco fell by 0.7%. The retailer’s market share declines are now slowing, down by 0.2% percentage points to 28.3% of the market – this is Tesco’s slowest rate of share loss since March 2014 and has been helped by an improved performance from its larger stores.
At Sainsbury’s sales fell by 1.1%, taking market share down by 0.2 percentage points to 16.3%. Fraser McKevitt comments: “Sainsbury’s has followed through on its promise to remove multibuy offers from its shelves in favour of everyday low prices and simple price cuts and less than 1% of its sales now require shoppers to pick up more than one item to feel the benefit of the promotion.”
Newly installed Asda chief executive Sean Clarke saw sales at the grocer fall by 5.6%, with share declining to 15.5%. Fraser McKevitt explains: “Asda is alone among the big four retailers in increasing the proportion of sales made on promotion compared with last year. However, its absolute level of sales sold on a deal remains behind its large competitors, where promotions account for 45.2% of sales.”
Morrisons sales fell by -1.8% – its best results since January this year. These figures still reflect its wave of store disposals in 2015 and their impact on Morrisons’ performance should start to lessen in the next few months. While Morrisons’ overall market share fell by 0.2 percentage points to 10.7%, its premium own-label lines showed strong growth of 3.8% – the best premium private-label performance among the big four.
Growth continues at Iceland, where sales are up 2.8% year-on-year. Co-op increased sales by 2.1% and Waitrose grew 1.6%, with all three retailers gaining market share for the third consecutive period, moving up to 2.1%, 6.4% and 5.1% respectively.
Discounter growth continues, helped by a 5% increase in the number of shoppers visiting either Lidl or Aldi this period. Lidl has reached a new market share high of 4.5% thanks to a sales increase of 12.5% while Aldi, up 11%, increased market share to a record 6.2%.