Recent data highlights Asda’s performance lagging behind other supermarkets as UK grocery sales experience a slowdown before the festive season.
- For the four weeks ending November 2, 2024, total till sales growth decelerated to 4%, down from 4.7% the previous month.
- Consumer spending has decreased, with an average spend per visit dropping to £18.67, marking a 6% decline from the previous year.
- While confectionery sales increased by 10.5%, sales of beer, wine, and spirits saw a slight decline, reflecting cautious consumer behavior.
- Ocado, Lidl, and M&S emerged as the fastest-growing retailers, while Asda experienced a drop in sales and market share.
In the lead-up to the busy Christmas season, Asda’s sales trajectory has fallen behind its competitors, according to the latest data from NIQ. Over the four weeks until November 2, 2024, the UK’s total grocery sales growth slowed to 4%, a decrease from the previous month’s 4.7%. This slowdown suggests that consumers are restricting spending in preparation for festive and Black Friday shopping.
Amid easing inflation, the average spend per shopping visit declined by 6% compared to last year, now standing at £18.67. Mike Watkins, NIQ UK’s head of retailer and business insight, commented on this trend, noting that consumers are currently conservative with their spending, prioritizing savings on essential items to afford luxury treats later. He described a polarized consumer base, with half of the households still feeling financial strain.
Despite these constraints, the confectionery category showed resilience with a 10.5% sales increase. This uptick was driven by early preparations for Halloween and Christmas festivities. On the other hand, sales in the beer, wine, and spirits category saw a minor 0.4% decline in unit sales, indicating that consumers might postpone buying these items until closer to Christmas.
As the Christmas advertising campaigns commence, they present an opportunity for retailers to capture consumer interest by highlighting new offerings and unique products. Watkins suggested that as more consumers opt to dine at home in the upcoming weeks, there could be a surge in premium private label food and drink sales, which are expected to perform strongly this holiday season.
Over the past three months, Ocado led the market with a striking 16.1% increase in sales. Lidl and M&S followed, seeing sales boosts of 11.9% and 11.4%, respectively. Meanwhile, major players like Tesco and Sainsbury’s enjoyed moderate growth, with increases of 4.7% and 4.6%, thereby gaining market share. In contrast, Asda encountered a 3.5% drop in sales, alongside a reduction in market share by one percentage point, highlighting significant challenges in its competitive standing.
As UK grocers head into the holiday season, Asda faces a challenging landscape with declining sales and market share while rivals capitalize on changing consumer behaviors.
