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14th November 2007, Oxford
As we enter into the busy Christmas period, competition for shopper spend intensifies in Grocery retail. Market research company Nielsen reports that 12 weekly growth in the £116 billion* grocery retail sector lingers under the 5% mark at +4.6% YoY, low when compared with the 7% growth we saw in the same period last year.
Mike Watkins, senior manager retailer services at Nielsen comments, “Christmas season 2007 starts with a more cautious consumer already looking for waysto make savings on their Grocery shopping. As we draw nearer to Christmas week, the battle for the wallet of the shopper will become evermore fierce. The marked difference when compared with 2006 is the strong performances turned in by all top 4 retailers.”
Nielsen’s Total Till monitor reports that growths at Tesco and Asda hold steady at +6% YoY with Sainsbury’s turning in an impressive 7.1% YoY sales growth. Following months of slower growth Morrisons is once again nudging towards the +5% YoY on the back of very strong in store promotions and a high profile advertising campaign.
Watkins continued, “The Top 4 Grocershave between them over 3200** stores,an increase of almost 25% on two yearsago. Whilst Morrisonhave sold a small number of sites over this period, the consumer is now able to chose from new shops from Tesco, Asda and Sainsbury and thishasmadethe competition for shopper spend ever more intense.“
He continued, “The impacthas beenan increase in promotional activity and more media campaigns focusing onlow priceorpricereductions. Retailers are also working hard to keep shopping bills in check by offering deals in sectors such as packaged grocery in order to off-set inflationary cost-price increases we are seeing coming through on staples, particularly in bakery and dairy.”
Going into this key trading period non-food, particularly, will see evermore intense competition from online. In 2006 general merchandise growth in grocery retailers was tracking ahead of market at a strong 8% YoY. In the latest 4 weeks Nielsen reports sales here at 4.7% YoY, accounting for 12% of all sales in grocery multiples.
Watkins concluded, “A poor summer in 2007 saw performances in general merchandise weaken to a low in June (+4%) and retailers will be looking to make up ground on this sector in the Christmas period through gifting offerings, as highlighted in Tesco’s Spice Girls’ television ad campaign, which kicked off this week.”
NOTES TO EDITORS
Nielsen’s Consumer Confidence survey polls over 26,000 consumers in 47 countries around the globe. It is used to gauge the sentiment and confidence in the economy, look at expenditure and saving patterns and understand people’s major concerns. The CCS is polled online. 1,000 respondents were polled in the UK.
About The Nielsen Company
The Nielsen Company is a global information and media company with leading market positions in marketing information (ACNielsen), media information (Nielsen Media Research), online intelligence (NetRatings and BuzzMetrics), mobile measurement, trade shows and business publications (Billboard, The Hollywood Reporter, Adweek). The privately held company is active in more than 100 countries, with headquarters in Haarlem, the Netherlands, and New York, USA. For more information, please visit, www.nielsen.com
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