UK: Food sales volumes remain under pressure
Food sales volumes in the UK have remained under pressure in the first months of 2012 following a year in which the number of items in shopping baskets fell.
UK food volumes dropped in 2011, an indication of the caution among local consumers last year.
Data issued by the British Retail Consortium this week suggests volumes are still under pressure.
A weighted average of sales from February to April showed food like-for-likes in the UK rose 0.6%, the BRC's Retail Sales Monitor said today (9 May).
The latest BRC Shop Price Inflation index, published yesterday, said food inflation was at 4.3% in April, down from 5.4% in March but still indicating volumes were lower year-on-year.
UK food sales by value fell in April year-on-year due in part to the impact of last year's Easter and the Royal Wedding benefitting sales.
"April's food retailing figures look disappointing – especially compared with the first few months of the year. But they are set against some tough comparatives with the previous April, when the weather was drier and Mother's Day and the Royal Wedding fell within the month," Joanne Denney-Finch, chief executive of industry analysts IGD, said.
"Our shopper research tells us to anticipate a rollercoaster of sentiment during 2012. Food companies will now be hoping the Queen's Jubilee celebrations bring a feel-good factor to the country."
The recent cold weather boosted sales in categories including soup, porridge and puddings.
On inflation, the BRC said retailers "continue to discount hard" but said they were using promotions that give consumers vouchers for money off their entire bill or off fuel rather than discounts on individual items. Such savings do not show up in the index.
BRC director general Stephen Robertson said a fall in the price of some commodities had led to the month-on-month fall in inflation. However, he warned of pressure on prices of other raw materials.
"Easing world prices for commodities such as wheat and sugar are working through to the shops. Dairy products, margarine and fish are among the foods seeing much lower inflation than last year," Robertson said. "Where food prices go next is hard to predict. Competition will remain intense in the face of weak demand from customers but some commodity price rises - soyabean and corn - are in the pipeline."
Sectors: Baby food, Bakery, Canned food, Cereal, Chilled foods, Commodities & ingredients, Condiments, dressings & sauces, Confectionery, Dairy, Dried foods, Fresh produce, Frozen, Ice cream, Meat & poultry, Natural & organic, Private label, Retail, Seafood, Snacks, World foods
The IGD's annual convention attracts the leading executives from the UK FMCG sector and last week they heard the likes of Tesco, Sainsbury's, Unilever and Heinz discuss the economy, multichannel strat...
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