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End of boom in UK supermarket sales?

Sales in UK supermarkets fell by 1.9% during the 12 weeks to 5 September 2021 compared to the same period in 2020, according to the latest figures from Kantar. However, […]
Wed 22/09/2021 by Richard Wilkinson

Sales in UK supermarkets fell by 1.9% during the 12 weeks to 5 September 2021 compared to the same period in 2020, according to the latest figures from Kantar. However, sales remain 8.7% higher than pre-COVID levels, reflecting that the impact of the pandemic is still being felt on the market. But with people set to return en masse to offices and schools in September, shopping habits are expected to change.

There are already signs of fatigue when it comes to home cooking. Sales of chilled ready meals, for example, increased by 11% this month as consumers’ lives get busier again. More people returning to towns and cities should also provide a boost for cafés and coffee shops, where spending last September was £187 million lower than in 2019. Hence, revenues could move away from the grocery sector.

The trend away from large shops is already happening on digital platforms, with the average online shop now worth £78.28, nearly £17 less than its peak at the start of the pandemic. The market share of online grocery has fallen to 12.2% this month from 13% four weeks ago – the lowest level since May 2020 as people continue to move their spend back in-store.

At a time when total market sales are contracting, Waitrose bucked the trend and found growth both online and in-store. With spend up by 2.2% in the past 12 weeks, it was the fastest growing supermarket for the second month in a row. As a result, Waitrose’s market share increased to 5.1%, a fifth consecutive increase which makes this its best run since September 2015. Tesco was the only other grocer to increase sales value year on year, up 0.2% on 2020. Performing better than the overall market meant Tesco also won share, gaining 0.5 percentage points to account for 27.3% of all sales.

 

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