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Grocery sector should expect a holiday season second wind

A slightly bigger lull than expected in grocery spending hints at shoppers saving their pennies for the Christmas season, according to Nielsen. Following a record summer of spending, the data analytics company’s figures reveal that shoppers are tightening their purse strings in anticipation for the upcoming holiday season.

Value sales growth slowed to +1.9% during the four-week period ending 6 October, compared to +2.4% sales growth in the previous month. Volume sales at the major supermarkets also fell to -0.6%, down from 0%.

Mike Watkins, Nielsen’s UK head of retailer insight, says: “The beginning of autumn signalled an objectively disappointing, though not entirely unexpected, slowdown in sales. But keeping in mind retailers had such a strong summer period, it’s likely shoppers are pressing the reset button after a season of excess.”

He also warned that recent increases in fuel prices and energy bills, which are having an impact on household budgets, has meant shoppers are becoming more cautious about their spending.

“It’s likely we won’t see this lull lift until the Christmas promotional period which should give the industry much-needed momentum,” he adds. “With the recent weakened trading, there is a pressing need for retailers to encourage shoppers to get back into the shopping mode. Retailers will look to introduce lower prices in private label across core grocery staples to help drive volume sales, and brands will need to ramp up their promotional activity to counteract it.”

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