Asda the winner as sales growth picks up
ASDA WAS the best performing of the big four retailers for the first time since December 2014, as football fever combined with sunny weather boosted overall supermarket sales by 3.6 per cent, the fastest rate of growth this year.
Leeds-based Asda beat the overall grocery sector with growth of 3.7 per cent over the 12 weeks to July 15 to post its strongest growth in more than five years, according to the latest Kantar Worldpanel statistics.
Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “Asda is concentrating very much on its own label business. Standard own label is doing well. Asda has recognised the need to invest in its own products.”
Asda’s core, standard ownlabel lines, which make up 40 per cent of its sales, saw a 9 per cent sales increase. The retailer also encouraged an additional 230,000 shoppers through its doors over the past 12 weeks.
“Asda has the highest basket spend of any retailer at £26. It is doing well in its bigger shops,” said Mr McKevitt.
Bradford-based Morrisons was the second best performer out of the big four with growth of 2.9 per cent as its premium line ‘The Best’ outperformed its cheaper own-label options, helping it to continue a run of growth stretching back to January 2017.
“Morrisons has invested in ‘The Best’ for a number of years, producing double digit growth,” said Mr McKevitt.
“It’s about getting the basics right. Morrisons has seen the largest run of growth out of the big four.”
In sharp contrast, the UK’s second biggest grocer Sainsbury’s, which is set to merge with Asda, saw sales rise by just 0.8 per cent.
“Sainsbury’s has returned to growth. There’s been a fresh round of price cuts, but it hasn’t seen a volume share increase yet,” said Mr McKevitt.
Kantar said supermarket sales have grown at their fastest rate this year thanks to football fever and the prolonged hot weather.
“England may not have won the World Cup – but its journey to the semi-finals not only helped to kickstart the summer, but supermarket sales to boot,” said Mr McKevitt.
“Over the past month, football frenzied customers visited supermarkets an extra 13 million times as they hurried to stock up on World Cup-viewing essentials, with alcohol in particular the stand-out winner. Christmas and Easter aside, the week that the England football team played both Colombia and Sweden saw more spent on alcohol than ever before – a colossal £287m.”
With the hot and sunny weather showing no signs of letting up, Kantar said al fresco dining has continued to tempt shoppers. Over the past month, sales of firelighters and fresh burgers rocketed by 47 per cent and 30 per cent as customers honed their barbecuing skills.
Meanwhile, sun care products and painkillers were both in demand: sales of sun creams jumped by 38 per cent, while nearly a third of all households picked up pain-killing tablets over the past month.
Mr McKevitt expects to see strong growth throughout the summer, driven by the hot weather.
“It’s non-food retail that is suffering. A lot of grocery spending is non-discretionary. An extra bottle of wine is not a huge expenditure,” said Mr McKevitt.
The warm weather has not only affected what customers buy, but where they buy their groceries from.
“Co-op experienced growth of 6.4 per cent as shoppers’ desire to maximise the sunshine encouraged them to shop more locally,” said Mr McKevitt.
“The past month in particular saw a boost to the retailer’s popularity, with shoppers returning to Co-op stores on average a record 10 times.”
Market leader Tesco reported growth of 2.3 per cent over the 12week period.