Supermarket sales plunge due to early Easter and consumers’ belt-tightening | City & Business | Finance

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Shoppers spent less at supermarkets in April due to inflation falling and purse strings being tightened following the early Easter, according to data from NIQ.

The market research group said that supermarkets’ sales over the four weeks to April 20 only grew 3.4 percent, compared to 5.4 percent the prior month. Having splashed out to celebrate Easter, NiQ said that consumers spent less in April and that, combined with falling inflation, lowered the growth rate for supermarket sales.

It added that an eight percent fall in general merchandise sales contributed to the slowdown in supermarkets’ sales. Mike Watkins, NIQ’s UK head of retailer and business insight, said that with inflation having fallen to low single digits, the growth rate for supermarkets’ sales will follow suit.

“The early Easter brought forward some spend to March so weekly growths in April were impacted. This in turn exaggerated some of the slowdown in growth which we were already seeing,” he said. “However, the growth at the major supermarkets was 2.6 percent and may be indicative of the level of growth now that inflation is in low single digits.”

Post-Easter, NiQ found that brands increased their promotional activity in an attempt to stimulate consumer spending. That resulted in spending on discounts and promotions rising from 24 percent of total spending to 25.3 percent last month and Watkins said this will likely continue.

“Even with lower food inflation and, for some households improving personal finances, shoppers still need to be persuaded to spend. Therefore, we can expect promotional activity to continue to increase,” he said.

According to NiQ’s data, Asda was the only supermarket to report falling sales over the 12 weeks to April 20, down 0.9 percent. At the other end, Ocado, Lidl and Marks & Spencer were the fastest growing. Ocado saw its sales rise 12 percent, while Lidl and M&S saw growth of 9.5 percent and 9.3 percent respectively. Asda, Co-op and Aldi also lost market share according to NiQ.

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