UK supermarkets go on marketing offensive to overturn cautious spending

Posted by AFN Staff Writers on 17th December 2012

Supermarkets in the United Kingdom have seen a slowdown in November and December 2012, for year-on-year value growth of grocery sales, despite increased advertising spend, voucher give-aways and promotions aimed at attracting cautious shoppers.

According to the latest retailer performance figures by global market research company Nielsen, aggregate sales growth for the UK’s leading supermarkets have been down from the previous year.

The Nielsen report said that in September 2012, food inflation reached a two-year low, while the recent Q3 2012 Nielsen Consumer Confidence and Spending Intentions survey showed that shoppers remain cautious about discretionary spending.

Nielsen reported that the weakened value growth in general merchandise sales at the leading supermarkets which is pulling down total store sales. However, the growth in packaged grocery products remains stable, while the sales of affordable luxuries such as confectionery, crisps and snacks continue to have “good momentum.”

Explaining the figures, Nielsen’s UK head of retailer insight Mike Watkins said that he had forecast a slow start to Christmas trading, as consumers are already “planning where they shop.”

“The supermarkets are investing heavily in advertising. So, looking ahead,  differentiated and inspiring advertising which really connects with consumers is expected to play an important role in attracting shoppers in December, particularly for the big Christmas purchasing trips from the 20 to 23 December which could be the biggest four days of sales in food retailing in 2012,” Mr Watkins said.

At the time of the Nielsen report, Tesco held the largest market share of the UK grocery market spend by value sales, followed by ASDA and Sainsbury’s.