Pricing To Be Only Sales-Growth Lever In 2023

 Namnews, 8th March 2023

Bloomberg Intelligence analysts have highlighted that the change in shoppers’ essential spending habits continues to force traditional supermarkets, such as Tesco, Sainsbury’s and Morrisons, to stay price competitive and defend market share against Aldi and Lidl. They expect volumes to remain subdued through 2023 while pricing becomes the only sales-growth lever.

Charles Allen, Retail Analyst at Bloomberg Intelligence, commented: “UK consumers continue to change their essential spending habits as they are forced to pay more to take home fewer items. Pricing has become the main food-retail growth lever, driving the 8.3% sales increase in February.

“Volume could remain subdued, evidenced by the 16th consecutive month of sales growth, trailing the record-high food inflation of 14.5%, according to the BRC Nielsen IQ Shop Price Index. Shoppers are lured by availability amid shortages and cheap assortments, which is triggering price reductions linked to loyalty programmes from traditional supermarkets like Waitrose. They’re trying to defend their position against Aldi and Lidl, which saw their combined market share reach a record of 16.5% in February. The profit dynamic for the country’s food retail could have changed as the UK Food CPI (Consumer Prices Index) moves ahead of PPI (Producer Price Inflation) output.”

NAM Implications:

• Meaning the discounters and own label are pushing against an open door…