Growth (by value) of British food sales for the four-week period ending December 27 was up by 2.6% year-over-year overall and by 4.5% year-over-year for grocery multiples.

“The consumer was much more cautious this year, and it was a back to basics Christmas,” Mike Watkins, senior manager, retailer services, Nielsen, noted.  “Sales of packaged grocery (+11%), frozen (+10%), and confectionery (+8%) were buoyant, while sales of liquor (+4%), heath and beauty (+1%), and deli counter (+1%) were more muted.”

Overall, “Out of Town” super stores (25,000 square feet+) were the star holiday performers, with sales up by 8% in the two weeks ending December 27, according to Nielsen.  The data suggests that shoppers held back on Christmas shopping, waiting until last minute and then maximizing their spending at larger stores.

Among “Out of Town” retailers, Asda had particularly strong sales growth (+6.7%).  The chain increased its market share from 15.7% during December 2007 to 16.1% this December, according to Nielsen.

Morrisons also showed impressive growth (+9.1%) during the 12 weeks ending December 27.  The retailer increasing its market share from 10.1% during Q4 2007 to 10.6% for the fourth quarter of 2008.

“Retailers with keen pricing and a value for money offering have really performed well over Christmas,” Watkins noted.  “It is evident that consumers really did cut back on the luxuries and make do this year.”

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Year-over-year growth at hypermarkets reached 6% during the period, while the smallest convenience outlets declined by almost 2% during the 12-week period.

In comparison, year-over-year growth in the British grocery sector stood at 3.2% during the 12 weeks ending 29 November, according to Nielsen.  Grocery multiples showed stronger growth (+5.6%) during the period.

“In order to save money shoppers are making less visits to grocery stores,” Mike Watkins, senior manager retailer services, Nielsen, noted.  “Nielsen has identified that virtually every major food retailer saw the number of visits per shopper fall in November versus a year ago and the big casualties are those retailers that people visit to do top up, small basket, and indulgence shops.”

According to Nielsen, there are exceptions to this trend.  Retailers like Morrisons and Asda, and value retailers like Iceland drew plenty of shoppers — and even showed accelerating sales in the most recent 12-week period. 

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According to Nielsen, the chain increased its market share from 14.9% a year ago to 15.6% during the last quarter — the retailer’s highest ever market share, aside from the Christmas 2007 season.

Asda’s performance (8.7% sales growth) during the most recent 12-week period ending November 1, 2008 easily bested the rest of the British grocery market, Nielsen reported Tuesday.  The chain showed especially strong growth during October, when the global financial crisis reached a boiling point.

Growth (by value) of food sales at British supermarkets continued to slow during the most recent 12-week period, dipping to 5.1%, versus the same period in 2007, according to Nielsen.

During the previous 12-week period ending October 4, food sales growth was slightly stronger in Britain (5.4%), despite especially weak September sales growth (4.5%).

“The topline growths at the Multiples are slowing, when they should, in fact, be accelerating,” Mike Watkins, senior manager, retailer services, Nielsen, noted.  “It’s looking like a tough Christmas ahead for food retailers.”

Among the top UK food retailers, Tesco remained the dominant value retailer, with a 28.1% share of grocery market spending during 12-week period ending November 1, 2008 — up 0.1% over the chain’s 28.0% share of value sales during the same period last year.

Morrisons continued to grow by more than 9% year over year for the quarter, but in the most recent four weeks, the chain’s growth dropped to under 7% year over year.

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Flagging sales in September, when growth dipped to 4.5% — a full percentage point below August growth levels, drove the declines.

“Shoppers are still trading down,” Mike Watkins, senior manager, retailer services, Nielsen noted.  “Family shoppers in particular, are trying to save money, with 70% saying on they are looking to economize on grocery shopping — up from 63% in June.” 

Among the top UK food retailers, Tesco remained the dominant value retailer, with a 28.3% share of grocery market spending during 12-week period ending October 4, 2008 — up 4.8% over the chain’s 28.0% share of value sales during the same period last year.

Meanwhile, Asda widened its lead in value sales over Sainsbury (13.9% share), achieving a 15.4% share of value food sales (and 8.3% year over year value growth) versus its 2007 share (14.7%).

Morrisons recorded the strongest year-over-year value sales growth of the top four food retailers (+9.6%), while Iceland showed the strongest overall growth (14.5%) during the 12-week period.

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Sales were strongest at large, out-of-town supermarkets, where 7% year-over-year growth was recorded.  In contrast, sales growth at large, centrally-located grocery stores slowed to just 1% year-over-year.

Food retailers who trade on value and price propositions also performed well.  Iceland saw 13% year-over-year sales growth, while Morrisons grew by 9.1% over the same three-month period last year. 

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