Supermarkets are grappling with their first significant fall in sales volumes since the second world war, according to analysts who warned shoppers' efforts to save money are having an "unprecedented effect" on the UK's major supermarkets.
The volume of items sold in Britain's supermarkets fell back by 3.2% in the first half of 2014 according to analysts at IRI, which it said showed that price cuts by supermarkets trying to combat competition from discounters such as Aldi and Lidl were not the only cause for a dramatic fall in sales.
"Consumers are struggling to keep within their budgets as wages rise slower than price inflation and child benefit cuts kick in," said Tim Eales, strategic director of insight at IRI.
"They are cutting back on how much they buy from the major supermarkets, some moving instead to the discount shops, buying lower priced alternatives or simply making do with less. This is having an unprecedented effect on sales from the UK's major supermarkets."
He said that even though retailers have cut the price of hundreds of products, the average price of a shopping basket had fallen just 0.5% in the past two months, the equivalent of just 54p a week for the average family spending £500 a month on groceries.
However, Eales estimates that shoppers switching to lower-cost options such as own-label or less premium brands cost the grocery industry more than £800m in 2013 and was likely to cost considerably more this year.
"It is going to be increasingly difficult for supermarkets to find paths to growth during the next few years unless they think differently," Eales said.
The analysts' figures come after the latest survey from the British Retail Consortium (BRC) on Tuesday showed the value of underlying food sales fell by 3.5% in the quarter to the end of July, the deepest three-month average decline since the retail trade body began keeping records in December 2008.
In contrast, non-food sales rose by an average 3.4% according to the BRC. The trade body blamed price cuts for the food industry flop, but IRI's figures indicate a change in shopper behaviour is also to blame.
Hot drinks and foods sold in tins and packets have seen the biggest dive in sales, with the volume down 5% in the first half of this year, while frozen foods and chilled foods have also suffered - down 4% and 3.6% respectively.
However sales of beer, lager and cider remain on the up, with sales rising 6.8% in volume as Brits enjoyed the World Cup with a tipple on the sofa. Non-alcoholic cold drinks also got a boost from the warm weather with sales up 0.6% on last year.
theguardian.com
The volume of items sold in Britain's supermarkets fell back by 3.2% in the first half of 2014 according to analysts at IRI, which it said showed that price cuts by supermarkets trying to combat competition from discounters such as Aldi and Lidl were not the only cause for a dramatic fall in sales.
"Consumers are struggling to keep within their budgets as wages rise slower than price inflation and child benefit cuts kick in," said Tim Eales, strategic director of insight at IRI.
"They are cutting back on how much they buy from the major supermarkets, some moving instead to the discount shops, buying lower priced alternatives or simply making do with less. This is having an unprecedented effect on sales from the UK's major supermarkets."
He said that even though retailers have cut the price of hundreds of products, the average price of a shopping basket had fallen just 0.5% in the past two months, the equivalent of just 54p a week for the average family spending £500 a month on groceries.
However, Eales estimates that shoppers switching to lower-cost options such as own-label or less premium brands cost the grocery industry more than £800m in 2013 and was likely to cost considerably more this year.
"It is going to be increasingly difficult for supermarkets to find paths to growth during the next few years unless they think differently," Eales said.
The analysts' figures come after the latest survey from the British Retail Consortium (BRC) on Tuesday showed the value of underlying food sales fell by 3.5% in the quarter to the end of July, the deepest three-month average decline since the retail trade body began keeping records in December 2008.
In contrast, non-food sales rose by an average 3.4% according to the BRC. The trade body blamed price cuts for the food industry flop, but IRI's figures indicate a change in shopper behaviour is also to blame.
Hot drinks and foods sold in tins and packets have seen the biggest dive in sales, with the volume down 5% in the first half of this year, while frozen foods and chilled foods have also suffered - down 4% and 3.6% respectively.
However sales of beer, lager and cider remain on the up, with sales rising 6.8% in volume as Brits enjoyed the World Cup with a tipple on the sofa. Non-alcoholic cold drinks also got a boost from the warm weather with sales up 0.6% on last year.
theguardian.com
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