A month after the momentous vote to leave the EU, there has still been no discernable effect on the UK’s grocery shopping habits, a leading analyst said today.
Speaking to the media this morning, Kantar Worldpanel’s head of retail and consumer insight Fraser McKevitt said: “The sky had not fallen down quite yet following the Brexit vote”.
Although consumer confidence and sterling had taken an immediate hit, as anticipated, there had been no immediate reaction from retailers or shoppers, with no impact on the prices retailers were charging or the sales volumes consumers are buying, he said.
However headline market growth of 0.1% was “nothing to shout about”, he added, and deflation remained a drag on growth, with prices falling 1.4% year on year – the same level as last month – in the 12 weeks to 17 July 2016.
“It remains to be seen if the Brexit vote will bring about any price rises this year,” he added. “If current trends continue, we could see prices back in positive growth by the end of the year, but that doesn’t take account of any intensification of the price war [between the big grocery retailers].”
Although all of the “big four” retailers – Tesco, Asda, Sainsbury’s and Morrisons – reported sales down, McKevitt noted the positive effect of beer sales on the back of Euro 2016 prior to England’s ignominious exit from the competition, growing 2.8%, ahead of the overall market, despite the poor weather hindering the potential for barbecues.
Tesco saw better performance in its larger stores, which helped slow down its market share decline of -0.7% to its slowest rate since March 2014. It now commands 28.3% of the total market, followed by Sainsbury’s, at 16.3%, who saw sales fall 1.1%.
Asda, which showed an increased willingness to fight on price by boosting its level of promotion during the period (although it remains behind its competitors on overall promotions) saw the greatest decline, down 5.6% to 15.5%.
But Morrisons enjoyed its best results this year, with sales down -1.8%, and strong performance from its premium brands (up 3.8%). Kantar also noted that the impact of last year’s store disposals should start to lessen in the coming months, providing a further boost.
The discounters continued to show growth, with Lidl’s 12.5% sales boost pushing its market share to 4.5%, and Aldi saw its market share grow to its highest level at 6.2%. Iceland, The Co-op, and Waitrose also performed strongly, gaining market share as they saw sales up 2.8%, 2.1% and 1.6% respectively.