U.K. supermarket sales increased 3.1% in the 12 weeks to Oct. 8, boosted by early Christmas spending, according to a report published Oct. 17 by Kantar Worldpanel.
The research firm, which tracks shopping habits, said like-for-like grocery inflation remains at 3.2%, outstripping the inflation rate measured by the consumer prices index. According to the U.K.'s Office for National Statistics, the annual rate of inflation crept up from 2.9% in August to 3.0% in September, the highest level since March 2012.
However, consumers could get some respite in 2018 as inflation for groceries is projected to drop below 2.0% in the first quarter, Kantar Worldpanel said.
In the 12-week period, Kantar Worldpanel said, the U.K.'s four largest supermarket chains — Tesco Plc, J Sainsbury Plc, Wm Morrison Supermarkets PLC and ASDA Stores Ltd., a unit of Wal-Mart Stores Inc. — had grown sales by value, but their market shares had shrunk as smaller operators continued to attract customers.
The big winner during the period was Morrisons, according to Kantar Worldpanel. Its sales increased 2.8% year over year, fueled by sales of frozen fish and healthcare products. Morrisons was also helped by a 29% rise in online sales.
Morrisons' growth rate, like those of the other major grocers, lagged far behind those of the discount chains Lidl Stiftung & Co. KG and ALDI Einkauf GmbH & Co. oHG. Lidl remains the U.K.'s fastest-growing supermarket with growth in the period of 16% year over year. ALDI's sales increased 13.4%.
"ALDI and Lidl collectively added an additional £390 million in sales this quarter, which accounts for half of the entire market's overall growth this period," said Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel.
Demand for Christmas treats boosted the latest figures. Sales of boxed chocolates in the four weeks to Oct. 8 was £69 million, a near threefold increase from August, the report said.