Published On: Wed, Apr 3rd, 2024
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Food inflation plunge boosts supermarket sales as Ocado and Marks & Spencer benefit most | Personal Finance | Finance


Falling food price inflation has encouraged shoppers to spend more at the tills of supermarkets, which saw their sales rise 5.4 percent last month according to data from NIQ.

The market research group says that shoppers spent £20.10 on average per trip during the four weeks to March 23, versus £19.50 for the same period a year ago. Additionally, store visits increased 1.1 percent.

NIQ attributes the increase to food price inflation, which dropped from five percent to 3.7 percent, its lowest level since April 2022. A year ago, food price inflation was running at 15 percent.

“As inflation slows, we have seen an improvement in grocery sales volumes during the first quarter,” said Mike Watkins, NIQ’s UK head of retailer and business insight.

“A driver of this was the further fall in food prices in March, together with intense competition amongst the supermarkets looking to drive footfall with promotional offers as seen on Mother’s Day and in the weeks leading up to Easter.”

Although food price inflation is falling, the ongoing squeeze on household finances meant that shoppers were still watching their spending. NIQ found that sales of household and pet related items fell 0.5 percent and 3.7 percent respectively last month.

Watkins said: “Overall consumer spend remains under pressure as many household bills continue to increase above the consumer price index (inflation) and this is reflected in the continued weak consumer confidence.”

According to NIQ’s data, Ocado and Marks & Spencer saw the biggest increase in their sales over the 12 weeks to March 23 out of all the grocers.

Ocado’s rose the fastest, up 13 percent, while those at M&S, which owns 50 percent of the online supermarket, climbed 11.2 percent. Sainsbury’s saw the best growth of Britain’s traditional Big Four supermarkets with a 7.9 percent increase, while Tesco’s rose by 6.3 percent. On the other hand, Asda saw the weakest with a 0.8 percent increase, while Morrison’s rose 4.7 percent.

NIQ said that Tesco, Sainsbury’s, M&S, Ocado and Lidl had grown their market share, while Iceland’s was static at 2.4 percent. The rest lost market share.



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