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Record month for UK supermarkets as consumers spend extra £1.9bn

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Via Financial Times

The UK’s supermarkets had their best month on record as panic-buying shoppers rushed to stockpile ahead of the country’s coronavirus lockdown, spending an extra £1.9bn on supplies.

Market data provider Kantar said on Tuesday that overall sales were up 20.6 per cent in the four weeks to March 22. Both Kantar and rival Nielsen, which estimated a similar uplift for the period to March 21, measure “till roll” data that includes food and non-food purchases at supermarkets.

The increase compared with a rise of about 1.4 per cent in the preceding four weeks.

Although images of trolleys laden with toilet rolls proliferated in the media, Kantar and Nielsen said the increase was mainly due to people making more shopping trips and spending slightly more each time. Kantar said the average household spent £63 more during the period.

Nielsen said the week ending March 21 was the peak, with supermarket sales rising 43 per cent. That included a 67 per cent surge in alcohol sales as pubs closed their doors, and an 84 per cent increase in frozen food sales.

Bar chart of Year-on-year sales rise* (%)  showing UK supermarkets' record month

It said the uplift equated to an extra £1.9bn being spent on groceries over the month, with consumers making 79m extra grocery shopping trips.

The shutdown of pubs and restaurants and the closure of schools and universities meant many families had extra mouths to feed. “Those with children over the age of 16 spent £508 this month on average, £88 more than they did in March 2019,” said Fraser McKevitt at Kantar.

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While all supermarkets took more at the tills, the winner among the “big four” traditional grocers was J Sainsbury with a 22.4 per cent increase over the four weeks on Nielsen data.

Bruno Monteyne, European food retail analyst at Bernstein, attributed this partly to its strong position in London and the south-east, which was at the centre of the stockpiling witnessed during the month. 

Kantar estimated that Londoners spent 26 per cent more than normal during the four-week period.

Waitrose also performed strongly, up 28 per cent, for similar reasons. Iceland sales increased by almost a third during the four weeks — the largest rise of any of the supermarkets — reflecting the upsurge in purchases of frozen food.

Discounters Aldi and Lidl continued to grow rapidly, although the margin of their outperformance against traditional retailers narrowed — partly because of their lack of an online grocery offer.

Grocery spend online rose roughly 14 per cent, with capacity constraints keeping its growth below that of the sector overall. However, Nielsen estimates that 600,000 households tried online shopping for the first time and that 1.2m additional orders were placed over the four weeks.

Mr Monteyne said the sales peak had probably passed, but that the closure of the leisure sector meant that sales would still be 10 per cent or so ahead of last year in the coming weeks.

@jonathaneley

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