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Growth in supermarkets dampened by dull weather

Sales growth in Grocery Multiples slowed to 4% YoY in the four weeks to 8th August according to Nielsen Scantrack.

GENERAL MERCHANDISE

Growth in supermarkets dampened by dull weather

Sales growth in Grocery Multiples slowed to 4% YoY in the four weeks to 8th August according to Nielsen Scantrack.

Shoppers having less need to buy seasonal food and drink resulted in the average number of visits to most major supermarkets being down over this period versus the same time last year reports, market research company Nielsen, today.

Mike Watkins, Se

nior manager Retailer Services at Nielsen commented: “The poor weather in July pulled top line growths of the Multiples down from the heady +6.6% of June to a disappointing +4.0% which was the lowest in 2 years, as a direct result of shoppers making fewer shopping trips. Aside from the drab weather and the seasonality of food sales this may also be an indication that we can expect 4% - 5% value growths to be the norm for the rest of 2009 as food inflation continues to slow.”

Unit growths held up at +2.3% compared to this time last year as the Multiples increased the levels of promotions and price cuts. The summer is generally the low point for promotions during the year but the increase in activity during 2009 has been maintained with 33% of sales being promoted in the last 4 weeks, up from 28% this time last year. Of the Top four, the level of promotions increased most within Tesco, to reach 36% of sales by value here.

When looking at individual retailer performances Waitrose has again performed well with double digit growths of 10.5% YoY in the quarter increasing to +11.4% in the last 4 weeks (to 8th Aug). Asda, Sainsbury's and Morrisons continue to add share at the expense of smaller retailers while Tesco share holds at 28.3%.

Watkins Added: “The timing of Club Card 2 is important for Tesco as promotions and price cuts from competitors continue to intensify. Nielsen research suggests that whilst shoppers as a whole do not see card schemes as enough of a differentiating factor to switch stores, for Tesco shoppers it is likely to encourage loyalty. With shopper promiscuity increasing and loyalty levels falling over the long term, the added benefits should encourage committed Tesco shoppers spend more at Tesco.”

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