Nielsen has said that high inflation levels in the UK supermarket sector are likely to impact shopper spend in the run-up to Christmas.
Mike Watkins, Nielsen’s UK head of retailer and business insight, said that while the outlook for improving sales growth in the run-up to Christmas is a positive one, much will depend on “how successful the current advertising campaigns will be in encouraging people to spend more at the supermarkets".
Watkins added, "Shoppers are now experiencing ‘peak inflation’, and a squeeze on discretionary spend is already being felt by many non-food retailers.”
'Economising, Not Compromising'
He also noted that he believes that UK shoppers are currently in an “economising, not compromising” mindset, which may see more numbers choosing to dine at home in the coming weeks, "helping supermarkets to snatch spend from restaurants”.
Watkins' comments come as Nielsen said that across the whole market for the four weeks ending 4 November, UK grocery sales increased by 3.1% year on year. Excluding the discounters, sales rose by 1.7%, while volumes fell by 0.5%.
This is a slight slowdown on the same period last year, with Watkins suggesting that shoppers may be looking to "change how they shop if it helps their monthly household budget, so they may be delaying spend until after Black Friday, or until all the Christmas promotions kick in, later in November.”
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up for ESM: The European Supermarket Magazine.
