Waitrose wounded as UK supermarket sales slow to lowest level in almost two years in critical run-up to Christmas
- Grocery price inflation rose by 1.6 per cent, nearly half the rate of last year
- This hit supermarket sales growth, which slowed to 2% in the last 12 weeks
- Waitrose sales fell 0.7%, the biggest slump out of all the supermarkets
Supermarket sales slowed to their lowest level since March last year in the critical pre-Christmas period, with the squeeze on UK consumers denting upmarket grocer Waitrose the most.
Food price inflation rose by 1.6 per cent, nearly half the rate of last year, which benefited consumers, but hit supermarkets.
According to the latest figures from Kantar Wordpanel, sales growth slowed to 2 per cent in the 12 weeks to the beginning of December, with Black Friday having no impact on the supermarkets.
Sales fall: Waitrose saw the biggest slump in sales of all supermarkets in the last three months
Waitrose, which is part of the John Lewis Partnership, saw sales fall 0.7 per cent during the period – the biggest slump of all the supermarkets.
In the last week alone, the grocer’s total sales have fallen by 2.5 per cent year-on-year, according to Waitrose’s own figures – although the firm claimed that Christmas orders were higher than in 2017.
Waitrose, which has just started trialling ‘farmbots’ at one of their farms, has been hit like the rest of the supermakets by the rise of Aldi and Lidl as cash-strapped shoppers look for bargains.
Steve Dresser at Grocery Insight said Waitrose was heading for a ‘near disaster’ at Christmas.
He said: ‘If customers are not tempted back in at Christmas with their focus on Heston and the premium Waitrose One range, it is then hard to understand how Waitrose hope to tempt customers in post-Christmas and in to 2019.’
Tesco and Sainsbury’s also suffered declines in the last three months, down 0.1 per cent and 0.2 per cent respectively, and continued to lose market share to the German discounters.
Asda was the only supermarket which held its market share steady in the period
Asda was the only supermarket to hold its market share, with sales rising 1.5 per cent compared to last year. The Co-op saw sales increase by 4.5 per cent, while Morrisons nudged up 0.5 per cent.
Both Aldi and Lidl saw double-digit growth over the last 12 weeks, with Aldi’s market share rising by 0.7 percentage points to 7.6 per cent and Lidl’s share jumping 0.5 percentage points to 5.6 per cent.
Despite the overall slowdown, Fraser McKevitt of Kantar Worldpanel, said grocers could still be in a line for a bumper Christmas because of when the actual Christmas day falls.
He said: ‘The last time Christmas Day fell on a Tuesday was in 2012 and the Saturday before was the busiest shopping day of the year. We expect the same trend to hold true this year, with Saturday 22 December pulling in the last-minute Christmas crowds.
‘Because of the way Christmas falls, grocers have an extra trading day this year meaning overall sales in December – up to and including Christmas Eve – could reach £10 billion.’
Kantar said sales of chocolates and Brussels sprouts have already reached £292million and £18million respectively.
Philipp Gutzwiller, head of retail for Lloyds Bank Commercial Banking, said: ‘With consumers having shown signs of tightening their belts in recent months, the supermarkets are focusing on persuading them to make room for a few luxuries by highlighting their more profitable premium own brands.’
He added:’The real focus now switches to the final two weeks before December 24, as all the supermarkets jockey to be Christmas number one. Which grocers enjoy a bright end to a difficult 2018 will set the agenda for who fares best as they enter 2019. ‘