Happy Easter for supermarkets but prices continue to fall

Consumer spending at UK supermarkets rose at the start of 2015 thanks to this year's early Easter, but the sector is still suffering from falling prices.

Easter egg: supermarkets saw a welcome sales bump over the holiday
Easter egg: supermarkets saw a welcome sales bump over the holiday

Data from Kantar Worldpanel for the 12 weeks to 27 March (Easter Sunday) showed sales up 1.1% on the same period last year - but in 2015 this did not include the week of Easter, which fell on 5 April.

A small increase in shopper numbers suggests Tesco could return to growth in the next few months; welcome news after 12 months in decline

Separate Nielsen Scantrack figures suggest sales during the key two week trading period up to Easter weekend fell 2% on last year.

Discounters Aldi and Lidl continue to achieve huge sales growth. Aldi’s sales in the 12 weeks to 27 March were up 14.4%, while Lidl’s rose even more sharply, by 17.7%, said Kantar. The two retailers now have market shares of 6% and 4.4% respectively.

Their growth, which is largely due to their low-priced offer, has forced the big four supermarkets to cut prices to compete, and the effects of this are still being felt - like-for-like prices are 1.5% lower than last year, said Kantar.

Among the big four, Asda has the bleakest outlook, with sales dropping 3.9% in the 12 week period. Morrisons was slightly ahead, with a fall of 2.4%. Sainsbury’s, meanwhile, is weathering the storm, with a 1.2% uplift - suggesting shoppers have not been deterred by its decision in February to ditch multibuy deals.

And market leader Tesco may be about to turn a corner. Sales are down in Kantar’s data, but only by 0.2%, while Nielsen data for the 12 weeks to 26 March shows 0.1% sales growth.

"A small increase in shopper numbers suggests Tesco could return to growth in the next few months; welcome news after 12 months in decline," said Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel.

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