UK supermarkets go on marketing offensive to overturn cautious shopper spending ahead of December

22/11/2012

UK supermarkets go on marketing offensive to overturn cautious shopper spending ahead of December

Contact: Neil Beston, Tel: 020 3103 3959

LONDON 22 November 2012 After a reasonable end to October, the UK's leading supermarkets have seen a slowdown this month in the year-on-year value growth of grocery sales, despite increased advertising spend, voucher give-aways and promotions aimed at attracting cautious shoppers.

According to the latest retailer performance figures released today by global information and insights company Nielsen, aggregate sales growth for the UK's leading supermarkets during the four weeks ending 10 November was up 2.0%* year on year. For the previous four week period (ending 24 October), year-on-year sales growth was 2.9%*.

Unit sales (volume) also slowed, albeit to a lesser degree, increasing by 0.8%* year-on-year compared to 0.9%* year-on-year growth for the previous four weeks.

In September, food inflation reached a two-year low, while the recent Q3 2012 Nielsen Consumer Confidence and Spending Intentions survey showed that shoppers remain cautious about discretionary spending. These facts are reflected in the weakened value growth in General Merchandise sales at the leading supermarkets (-5% fall year-on-year), which is pulling down total store sales. However, the growth in Packaged Grocery remains stable at 3%, while the sales of affordable luxuries such as Confectionery/Crisps and Snacks continue to have good momentum at 5%. Cautious consumer sentiment, though, is reflected in the modest year-on-year sales increase of 2% for Beers/Wines/Spirits.

Explaining the figures, Nielsen's UK head of retailer insight Mike Watkins: It's been a roller-coaster year, so we've been forecasting a slow start to Christmas trading. With so many money-off coupons available, consumers are already planning where to shop.

The supermarkets are investing heavily in advertising. For example, during the week ending 3 November, Morrisons spent almost �320K on promoting its annual Christmas Coupon incentive; Waitrose was the highest supermarket spender on TV at just under �750K, whilst Tesco spent the most across TV and print at just over �1.9m**.

So, looking ahead, differentiated and inspiring advertising which really connects with consumers is expected to play an important role in attracting shoppers in December, particularly for the big Christmas purchasing trips from the 20 to 23 December which could be the biggest four days of sales in food retailing in 2012.

*Source: Nielsen Scantrack Grocery Multiples

**Source: Nielsen Ad Dynamix

12-Weekly % Share of grocery market spend by retailer and value sales % change

Retailer % share, 12 weeks

to 10 Nov 2012

% share, 12 weeks

to 12 Nov 2011

% value change vs same

12 Weeks Year Ago

TESCO

28.7%

29.3%

2.8%

ASDA

16.4%

16.3%

5.7%

SAINSBURY

16.0%

15.6%

7.4%

MORRISONS

10.7%

11.2%

0.9%

CO-OPERATIVE

7.0%

7.5%

-1.1%

WAITROSE

4.1%

4.0%

10.1%

M&S

3.4%

3.5%

3.9%

ALDI

2.6%

2.0%

38.9%

ICELAND

1.9%

1.9%

5.3%

LIDL

1.9%

1.9%

5.6%

The figures in the table are based on 12 weeks sales through to 22 November 2012 compared with the same 12 week period in 2011. Source: Nielsen Total Till, Nielsen Homescan

About Nielsen Homescan Total Till:

Unless otherwise stated, data is based on all purchases, bar-coded and non bar-coded, brought back into the home from any outlet by an in-home scanning panel of more than 14,500 households. Total spend includes all items stocked by any outlet, including grocery, general merchandise and clothing.

About Nielsen

Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and related properties. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA and Diemen, the Netherlands. For more information, visit www.nielsen.com.

LINK:	http://www.nielsen.com/uk/en/insights/press-room/2012/uk-supermarkets-...
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