UK grocery sales growth has decelerated recently, with Asda notably lagging behind its competition.
- General merchandise sales have decreased in both value and volume.
- Ocado and Lidl have emerged as the fastest-growing grocery chains in the UK.
- Asda is planning strategic investments to improve its position during the holiday season.
- Financial pressures are influencing consumer choices, causing many to prioritize essential spending.
In the recent market overview, it was observed that UK grocery sales growth slowed to 4.0% over the last four weeks leading to November 2, down from 4.7% the previous month. This trend is largely attributed to consumers curbing their spending as they prepare for imminent holiday expenses such as Black Friday and Christmas.
The segment for general merchandise experienced a downturn, with sales decreasing by 1.4% in value and a more pronounced 5.5% drop in volume. These figures reflect a cautious consumer approach focusing on essential over non-essential items.
Meanwhile, Ocado and Lidl have posted significant growth figures of 16.1% and 11.9%, respectively, over a 12-week span ending November 2. M&S also showed strong performance with an 11.4% increase, further indicating a competitive retail environment. Market leaders such as Tesco and Sainsbury’s also saw growth, albeit at a slower pace, yet both managed to expand their market share.
In stark contrast, Asda continued to face challenges, recording a 3.5% decline in sales alongside a 1 percentage point loss in market share. In response, Asda has announced a strategic plan to invest £13 million into its store operations during the holiday period to enhance services and customer experience.
The grocery market is currently marked by a bifurcation, where half of the households are reportedly feeling financial strain. Mike Watkins from NIQ attributes this to ongoing financial pressure, causing consumers to prioritize spending on groceries while reducing expenditure on indulgences.
Asda is navigating through a competitive and financially pressured market, striving for improvement amidst slowing sales growth.
