UK Food Sales Decline as Supermarket Price Wars Continue
The UK food market has experienced its deepest three-month average decline since the BRC-KPMG Retail Sales Monitor began in December 2008. Over the last three months, food showed a decline of 1.4%, in contrast with the growth of 0.4% experienced over the last twelve months. Non-food achieved growth of 3.4% over the three months to July 2014, in line with its twelve-month average of 3.8%.
Helen Dickinson, Director General, British Retail Consortium, says: “Food experienced its deepest three-month average decline since at least December 2008, explained partly by the continuing keen price competition between supermarkets, which consumers are taking full advantage of, and record low food inflation.”
David McCorquodale, head of Retail, KPMG, says: “The tale of two sectors continues with polarisation between food and non-food. While non-food retailers had a stellar month, surpassing even last year’s record sales performance, the grocers saw sales tumble in value as their competitive pricing continued.”
He adds: “The grocers’ figures continue to make for gloomy reading for the sector. The impact of their prolonged discounting campaigns may be good news for consumers, but must be being felt deeply by the retailers given like for like sales have fallen in value every month for the last 12 months, save for April when Easter helped sales. The headache for the grocer investor is the tonic for the consumer: it’s likely these price wars are here to stay for the foreseeable future.”
