UK recession to limit 2023 growth in food retail sales to 5% - NielsenIQ

By James Davey

LONDON – Weak confidence round private funds and a squeeze on disposable revenue will maintain again development in meals retail gross sales to round 5% in 2023, in response to market researcher NielsenIQ.

In November, the Financial institution of England forecast Britain was heading into a protracted recession, with inflation, operating at 10.7%, not returning to its 2% goal till early 2024 and the federal government’s funds watchdog predicted the largest squeeze on residing requirements since information started within the Fifties.

“We additionally anticipate the recession to begin to affect shopper behaviour and reframe general retail spend,” Mike Watkins, NielsenIQ’s UK head of retailer and enterprise perception stated on Tuesday.

He stated 2023 will probably be powerful for UK households as 33% solely manage to pay for for important spending with simply 5% capable of spend freely. Customers within the center are those who reside comfortably however nonetheless watch their wallets.

NielsenIQ stated UK grocery gross sales rose 10.9% within the 4 weeks to Dec. 31 year-on-year, masking a drop in volumes when accounting for inflation.

It stated supermarkets benefited from very chilly climate in early December and likewise from continued rail disruption on account of labour strikes which held again spend within the hospitality channels serving to meals retailers to realize “share of energy consumed” from the out-of-home channels.

Echoing knowledge from rival market researcher Kantar printed final week, NielsenIQ stated discounters Aldi UK and Lidl GB have been the perfect performers with gross sales development of 19.3% and 15.7% respectively over the 12 weeks to Dec. 31.

Of Britain’s conventional main grocery store teams, No. 2 participant Sainsbury’s was the perfect performer with gross sales up 8.5% over the 12 weeks, adopted by market chief Tesco with an 8.0% gross sales enhance and No. 3 Asda with gross sales up 7.9%. Morrisons was the laggard with gross sales falling 1.1%.

Marks & Spencer additionally carried out nicely with gross sales up 9.0%.

Tesco, Sainsbury’s and M&S are all on account of replace on Christmas buying and selling this week.

NielsenIQ stated that whereas on-line gross sales rose 2.8% in December, its share of the grocery market fell to 10.4%, versus 11.2% a 12 months in the past.