Grocery growth slows but financial outlook brightens for shoppers

Grocery growth slows but financial outlook brightens for shoppers

Take-home grocery sales rose by just 1.0% over the four weeks to 9th June, marking the slowest increase since June 2022, as poor weather and falling inflation impacted the sector.

The latest data from marketing analysts, Kantar shows that growth in footfall has also stalled, with the average shopper visiting the supermarket 16.3 times this month, down from 16.4 in June 2023.

The 16th consecutive monthly fall in inflation comes as welcome news for households, 36% of whom now describe their financial position as comfortable – the highest proportion since 2021.

Fraser McKevitt, head of retail and consumer insights at Kantar said the cost-of-living crisis was far from over, with 22% of households stating they are struggling, meaning they aren’t able to cover their expenses or are just making ends meet.

“However, there are positive signs that many of us no longer feel the need to restrict our spending quite so much, with lower inflation helping to ease the pressures on people’s pockets,” said Fraser.

“In May, we recorded the largest jump in the number of comfortable households since January 2023, rising by two percentage points on February 2024’s figure. Costs are falling in nearly one third of the grocery categories we track, including toilet tissues, butter and milk. That’s a big increase from last year, when just 1% of markets were declining.”

Shoppers haven’t yet been able to enjoy the outdoors with the wet weather playing havoc with traditional summer shopping habits

He added that the sixth wettest spring on record hadn’t just dampened spirits leading into summer, but it has also made a mark on the grocery sector too.

“We’re not yet reaching for those typical summertime products and are making some purchases you wouldn’t expect in June,” he added.

“Consumers bought nearly 25% fewer suncare items this month compared with last year, while prepared salads dipped by 11%. On the other hand, warming fresh soup sales jumped by almost 24%.”

And while a drop in grocery price inflation might be contributing to slower market growth, it is leading to improved consumer sentiment and supermarkets will be waiting to see if there will be wins for them as the men’s UEFA Football Championship is underway.

“The grocers are looking to entice in consumers enjoying this year’s tournament, with the proportion of beer and lager sales on promotion leaping up to over 40% in the latest four weeks,” said Fraser.

“Retailers will be competing with fans heading out of the house to watch the football as well as with each other.”