The Bank of England predicted in November that Britain was entering a protracted recession, with inflation currently at 10.7% and not expected to reach its target of 2% until early 2024. The government’s budget watchdog also forecast the biggest decline in living standards since records began in the 1950s.
According to market researcher NielsenIQ, the rise in food retail sales will only reach 5% in 2023 due to low consumer confidence on personal finances and a squeeze on disposable income.
The head of retailer and business intelligence for NielsenIQ in the UK, Mike Watkins, stated on Tuesday, “We also expect the recession to start influencing shopper behavior and reframe overall retail spend.”
He predicted that 2023 will be challenging for UK households since 33% will only have enough money for necessities and only 5% will have extra money to spend. The middle-class consumer is one who has a comfortable lifestyle yet is nonetheless cautious with their money.
According to NielsenIQ, UK grocery sales increased 10.9% year over year in the four weeks leading up to December 31 although volumes fell when inflation was taken into account.
It claimed that early December’s extremely cold weather and the ongoing train disruption brought on by labor strikes reduced spending in the hospitality sector, allowing food retailers to increase their “share of calories consumed” through out-of-home channels.
Discounters Aldi UK and Lidl GB were the biggest achievers, according to NielsenIQ, which confirmed statistics from rival market researcher Kantar published last week. Sales increased by 19.3% and 15.7%, respectively, during the course of the 12 weeks ending on December 31.
With sales up 8.5% over the course of the past 12 weeks, Sainsbury’s (SBRY.L), the No. 2 player among Britain’s conventional major supermarket groups, outperformed market leader Tesco (TSCO.L) and No. 3 Asda. Morrisons lagged behind with 1.1% lower sales With sales increasing 9.0%, Marks & Spencer (MKS.L) also did well.
While online sales increased 2.8% in December, according to NielsenIQ, their proportion of the grocery market decreased from 11.2% to 10.4%.
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