Insight: July heatwave boosted sales of branded grocery products
New figures on the grocery market for the 12 weeks to 12 August have revealed that sales growth of branded products outstripped that of own-label lines for the first time since May 2015.
The figures from Kantar Worldpanel show that heavily branded categories such as savoury snacks, ice cream and soft drinks performed particularly well during the heatwave which meant branded growth of 3.9% was ahead of that for total own label.
Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “Consumers’ willingness to spend that little bit extra to fully enjoy the summer sunshine has helped push brands ahead of their own-label counterparts. At Tesco and Sainsbury’s branded growth has outstripped own-label for a while and – as the two biggest retailers in the grocery market – this has contributed to the market shift. More expensive premium own-label lines across the market are still growing strongly though – up 6.3%."
Kantar’s figures also show that UK shoppers spent an additional £67 million on alcoholic drinks in July. In addition, sales of non-alcoholic beers were up 58% year-on-year in the 12 week period while soft drink sales increased by 28%.
Looking at the performance of the individual supermarkets, the Co-op experienced its fastest rate of growth in nearly seven years with an uplift of 7.8% as consumers’ preference for shopping locally during the heatwave helped it attract an additional 263,000 shoppers. The retailer also saw the average customer visit 22 times over the 12 weeks, which helped its market share to increase of 0.3 percentage points to 6.6%.
Morrisons saw its sales rise by 2.7% as it regained its position as the fastest-growing of the big four supermarkets according to Kantar’s figures. Although the retailer cut back on promotions in the 12 week period, it gained 231,000 new shoppers, 66% of whom were more affluent ABC1 customers. Meanwhile, its market share was 10.4%.
Despite growth of 2.6%, Asda’s market share dropped by 0.1 percentage points to 15.2%. McKevitt said: “Asda has bucked the trend when it comes to brands versus own labels. Its private lines grew ahead of brands – both its standard-tier range and premium ‘Extra Special’ range experienced a sales increase of 8%. Over the past 12 weeks two-thirds of Asda’s growth came from family households.”
Having experienced strong growth in its Express convenience stores, Tesco increased its total sales by 1.8%, although the retailer’s market share dropped by 0.5 percentage points to 27.4% in the period.
Meanwhile, Sainsbury’s achieved its fastest rate of growth since January 2018 with sales up 1.2% as trade was boosted by a strong online performance and the growth of its premium ‘Taste the Difference’ range. However, the retailer's market share declined by 0.4 percentage points to 15.5%.
Aldi witnessed double-digit growth of 12.6% which helped the retailer up its share of the market to 7.6% with over half of growth coming from the fresh and chilled aisles. At Lidl, sales climbed by 8.6% to take the retailer’s market share to 5.5%.
Sales at Iceland increased by 3.8% which meant its market share was 2.1%. Despite achieving sales growth of 2.4%, Waitrose dropped its market share by 0.1 percentage points to 5% in the period.
Meanwhile, online grocer Ocado achieved sales growth of 8.5% and grew its market share by 0.1 percentage points to 1.2%.
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