UK grocery prices not yet affected by Brexit

Britain’s decision to quit the EU in last month’s referendum has not had an immediate impact on grocery prices or the volume of goods sold, according to industry data.

However, several surveys have indicated a sharp drop in UK consumer confidence but there is little evidence that has translated into lower spending.

Market researcher Kantar Worldpanel said overall UK grocery sales rose 0.1% year-on-year in the 12 weeks to July 19, while deflation was 1.4%.

“The EU referendum result has had no immediate impact on the prices retailers are charging or the sales volumes consumers are buying over the past 12 weeks,” said Kantar’s.

Some analysts think prices will rise as a drop in sterling following the referendum increase retailers’ buying costs.

Rival research group Nielsen said the value of UK grocers’ sales fell 2.4% year-on-year over the four weeks to July 16 — the worst figure since the four weeks ending July 19 in 2014. But it blamed the decline on wet and cool weather, rather than Brexit.

Kantar said market leader Tesco’s sales fell 0.7% year-on-year over the 12 weeks, with its market share falling 0.2 percentage points to 28.3% — its slowest rate of share loss since March 2014.

Morrisons, the No 4 player, produced its best result since January with a 1.8% sales fall — its figures still reflecting a wave of store disposals last year.

Asda, the British supermarket arm of Wal-Mart that is No 3 in the sector, remained the laggard with a 5.6% fall in sales.

New chief executive Sean Clarke started at Asda on July 11. No 2 Sainsbury’s saw sales fall 1.1%, partly reflecting a move to phase out multi-buy offers.

German discounters Aldi and Lidl recorded record market shares of 6.2% and 4.5% respectively, reflecting sales growth of 11% and 12.5% that is driven by store openings.


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