UK grocery sales growth has slowed significantly, affecting major retailers.
- Asda is experiencing a decline in sales and market share.
- Consumers are cautious, saving for upcoming holidays like Black Friday and Christmas.
- NIQ data reveals Ocado and Lidl as the leading growing grocers.
- Asda unveils a £13m investment plan to improve operations.
The UK’s grocery sector is witnessing a slowdown in sales growth, as consumers rein in their spending ahead of prevalent shopping events like Black Friday and Christmas. According to fresh data from NIQ, UK’s supermarket sales growth decreased to 4.0% in the four weeks leading up to 2 November, a drop from 4.7% in the preceding month.
Asda, the UK’s third-largest supermarket, continues to face challenges, evidenced by a 3.5% drop in its sales and a 1% decrease in its market share over the past year. This marks a significant setback for Asda in a competitive market environment where other grocers like Ocado and Lidl have shown impressive growth, with their sales increasing by 16.1% and 11.9% respectively over the same period.
Consumer caution has become apparent as many are focused on affording indulgences come holiday season, despite the pressure on personal finances. As Mike Watkins from NIQ UK comments, “Shoppers so far have been cautious and it’s evident that they are saving on grocery essentials to be able to afford treats and indulgences and we have a polarised consumer with 50% of households continuing to feel pressure on personal finances.”
In contrast, both Tesco and Sainsbury’s have strengthened their hold on the market, with Tesco experiencing a 4.7% rise in sales and Sainsbury’s showing a 4.6% increase, further illustrating the competitive landscape within the UK grocery sector. Meanwhile, Asda strives to remedy its declining performance with strategic investments.
To address the looming challenges, Asda has announced a £13m investment intended to enhance customer service by increasing staff availability during the busy festive quarter. This move comes as a part of Asda’s broader transformation initiatives under the leadership of Lord Stuart Rose, who assumed the chairmanship of the company recently.
Asda faces significant hurdles amid a competitive grocery market and cautious consumer spending.
