Supermarket sales in decline at start of the year

UK supermarkets experienced their lowest volume growth in over nine months, as the cost-of-living crisis forced customers to cut back on spending.

The latest figures from market analyst Nielsen published on 7 February revealed a 6.9% decrease in volume sales for supermarkets in the four weeks to 28 January.

The firm added that customers were likely stuck to a fixed shopping budget and focused on essentials instead. Figures during the period showed that bakery products increased by 12.6% in value sales, dairy by 11.5%, and frozen by 8.9%.

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In comparison, value sales for fresh produce and alcohol fell by 3.6% and 4.7% respectively. As a result, Nielsen predicted that shoppers will “continue to trade down to cheaper brands or private label products”.

Mike Watkins, NielsenIQ’s UK head of retailer and business insight, said: “We expect a challenging first quarter for the grocery industry, with inflation very much top of mind for shoppers. In January we have seen private label sales grow in household by 16.5%, ambient grocery by 16.8% and frozen by 20.2%.

“Also, when consumers are cash poor, they also shop more frequently and across more retailers, because they can only afford to shop for groceries ‘little and more often’ to help manage household budgets. This will probably continue until Easter, when family gatherings and hopefully better weather gives a boost to sales.”

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