Delayed summer sunshine knocks supermarkets as sales tumble

SUPERMARKETS slumped yesterday as sales suffered their first decline in three years, with this year’s weather, until now, having failed to live up to last year’s scorching summer.

Overall sales in the grocery sector fell 0.5pc in the 12 weeks to July 14, according to data from Kantar. The last time total sales declined was in June 2016, the month of the Brexit referendum.

The cooler weather saw consumers spend £75m less on alcohol compared to the same 12-week period last year. Sales of soft drinks and ice cream each fell by more than £50m.

Sales at all of the “big four” retailers – Tesco, Sainsbury’s, Asda and Morrisons – slid, as they ceded market share to discounters Aldi and Lidl.

Grocery prices increased 0.9pc during the period compared to the same time last year. This marginal slowdown in inflation in the sector was “good news for consumers but has made it harder for retailers to achieve value growth”, said Kantar’s Fraser Mckevitt.

Tesco led the listed supermarkets lower as investors refused to bet on the coming heatwave improving the outlook, declining 5.3p, or 2.3pc, to 229.9p. Sainsbury’s fell 3.6p to 203.30p and WM Morrison shed 1.1p to

204.6p. Ocado managed to boost its sales by 12pc, growing faster than any other grocer as consumers shift to online. However, it was not enough to prevent the shares slipping 16.5p to £12.03, a fall of 1.5pc. Fashion retailer Ted

Baker saw the 13.5pc gain in its shares from Monday partially reversed as it shed 52.5p, or 5.5pc, to 898.5p, making it one of the biggest fallers among the FTSE 250. The shares had shot up on Monday following reports that founder Ray Kelvin was considering backing a consortium to buy the firm.

At the other end of the FTSE, packaging companies surged after FTSE 100 firm

Mondi, which has a dual listing in South Africa, was forced under South African stock exchange rules to reveal that expected earnings per share would be between 28pc and 37pc higher for the first six months of the year. Analysts at Citigroup cautioned that investors “should not expect any consensus changes for the full year” until Mondi reports its half-year results on Aug 1, but the shares jumped 31.5p, or 1.76pc, to £18.21p. Fellow packaging firms DS Smith and Smurfit

Kappa were lifted by a combination of the news from Mondi and a positive trading statement from Finnish paper mill UPM. DS Smith gained 12.6p, or 3.4pc, to close at 379.6p, while Smurfit Kappa added 1.46p to 29.96p, a rise of 5pc.

The FTSE 100 rose a solid 0.56pc to 7,556.86 points, though it failed to match the gains seen in Europe, where the Stoxx

600 gained 0.98pc.