M&S UK’s Fastest-Growing Food Retailer

 Namnews, 14th December 2021

Latest industry data from NielsenIQ shows that Marks & Spencer was the fastest-growing food retailer in the UK during the 12 weeks to 4 December, providing further evidence that the group’s turnaround plan is delivering results.

Interim figures from M&S last month showed sales in its food division had grown 10.7% to £3.14bn, with operating profit climbing 31% to £143.7m. The group highlighted its success in broadening the appeal of its food range with more products and family-orientated ranges. A shift towards lower prices has also helped the business gain market share as people used the retailer from bigger grocery shops.

The NielsenIQ data reveals that sales at M&S rose 9.1% heading into Christmas – a traditionally strong period for the retailer as consumers treat themselves to premium food items.

Lidl (+8.3%) and Aldi (+4.6%) were the only other grocery retailers to grow sales against this time last year, with other chains facing tough comparatives against bumper trade in 2020.

Mike Watkins, NielsenIQ’s UK Head of Retailer and Business Insight, said: “Whilst our data may show that performance at the big four supermarkets is weaker, we must remember that this is against strong comparatives last year when the nation was in lockdown. For example, retailers with a larger convenience footprint may see higher fluctuations in sales.

“Equally, a 10% fall in beers, wines and spirits (BWS) sales across the industry in the last four weeks will have impacted sales at the larger stores of many of the ‘big four’ supermarkets. Nevertheless, with two weeks to go, there is still a lot to play for, with special prices from loyalty cards which are the promotional mechanic most likely to encourage shoppers to spend more this Christmas.”

12-weekly % share of grocery market spend by retailer and value sales % change

Meanwhile, NielsenIQ is predicting that shoppers will spend £6.8bn at UK supermarkets in the next two weeks leading up to Christmas Eve, up from £6.7bn in 2020, as people prepare to celebrate Christmas with family and friends after Covid restrictions curtailed last year’s plans.

Total Till grocery sales fell 2.5% in the last four weeks ending 4 December, although grocery spend had already begun to pick up, with sales down only 0.9% in the first week of December, indicating that they will increase in the next two weeks ahead of Christmas.

Shoppers appear to be looking to treat themselves to more premium and higher value items this Christmas, with NielsenIQ data showing that the average value of the shopping basket is now 2.6% higher this year. Growth products include celebration cakes (+15.6% to £15m), premixed alcoholic drinks (+13.7% to £25m), fresh olives (+7.4% to £9m) and fresh pizza  (+13.1% to £50m) and fresh ready meals (+11.3% to £195m), suggesting people are preferring to entertain and dine at home.

Online grocery sales fell by 13% in the last four weeks against strong lockdown comparatives in the same period in 2020. The online share of FMCG sales at UK supermarkets remains at 12.4% – similar to last month – with in-store sales up by 0.2% – indicating that shoppers are continuing to adopt omnichannel shopping behaviours.

Watkins concluded: “This year more than ever, we can expect shoppers to plan activities and meal occasions around family and friends. The sales figures in November are partly due to lockdown comparatives but also shoppers delaying big shopping trips until the final week before Christmas when fresh foods and any remaining indulgences are purchased.

“For 1 in 3 households good availability, as well as low prices, are the most important factors in deciding where to shop and we anticipate that the 23rd December is likely to be the peak day for trading at UK supermarkets.”

NAM Implications:

• As always, key that you compare your retail business with the Nielsen stats…
• …by retailer and category…
• …to ensure your fair share of sales and investment.