Ice- cream saves the supermarkets

Sales grow at their fastest rate for five years

BOOMING ice-cream sales during the recent heatwave helped supermarkets storm to their best results in five years.

Sales grew at their fastest rate since March 2012, rubbishing previous fears of a sector slowdown.

There was an increase of 5pc in the 12 weeks to June 18, according to consumer research company Kantar Worldpanel – a stark contrast to the 0.2pc decline a year before. This month’s hot weather helped drive the growth, causing sales of ice-cream and cider to shoot up 12pc and 16pc respectively.

Separate industry data from Nielsen also highlighted the impact of the warm weather, with grocery sales in the four weeks to June 17 up 4pc year-on-year.

Sales of soft drinks were up 9.1pc, alcohol 6.8pc and frozen food up 7pc, according to Nielsen.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said that part of the supermarket growth was down to the weak sales figures last year and the continuing rise in grocery inflation. Grocery inflation ran at 3.2pc for the 12 week period – adding an extra £133 on the average household’s annual shopping bill.

McKevitt said that butter and fish rose most quickly, with the former up 20pc in the past year.

Fish, meanwhile, is up 14pc due to a shortage of farmed salmon.

Supermarkets have been working with suppliers to avoid passing on inflationary pressures to customers. Earlier this month, Tesco boss Dave Lewis said that inflation at his stores was just 1.4pc.

Of the top four grocers – Tesco, Sainsbury’s, Morrisons and Asda – Morrisons boasted the best sales growth, jumping 3.7pc in the period, according to Kantar.

Sales at Tesco grew 3.5pc, their fastest since April 2012, after it attracted a further 369,000 shoppers. Asda and Sainsbury’s grew 2.2pc and 3.1pc respectively.

All four supermarkets, however, lost market share as Lidl and Aldi grew 18.8pc and 18.7pc respectively. The German supermarkets account for 11.9pc of the market – rubbishing retail chiefs’ once-firm belief they would never have more than a tenth of the share.

Keith Richardson, head of retail at the commercial arm of Lloyds Bank, said: ‘While positive, these figures also show that consumers are feeling the pinch and are working hard to find ways to maintain spending despite those rising prices.

‘In particular, shoppers are continuing to switch from brands towards own- label premium ranges, from nights out to in, and in some cases from the major supermarkets to discounters such as Aldi and Lidl.

‘The fact that this is the third consecutive period in which all grocers have been in growth is good news, but that will have been partly driven by rising prices, and the pressure this puts on household spending will be a concern. So far, supermarkets have benefited from protecting consumers from as many of the price rises as possible. Whether they can continue to do so remains to be seen.’

Rupal Karia of business technology firm Fujitsu, said: ‘This rise in sales has provided a muchneeded boost to the High Street.’