First signs of a UK consumer spending slowdown?

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By: Wise Marketer Staff |

Posted on July 30, 2007

First signs of a UK consumer spending slowdown?

The first signs of a slowdown in the UK's supermarket sector have begun to appear, with a dip in the market's growth trend at only 4%, according to TNS Worldpanel research director, Chris Longbottom.

The latest supermarket till-roll data shows the first signs of a possible consumer spending slowdown, based on the market growth rate dipping to 4%, compared to a much more buoyant period one year earlier.

Why the slowdown? According to Longbottom, the slowdown may be due in part to the impact of ongoing poor weather during summer this year, combined with a continued squeeze on consumers' budgets and spending.

However, against this background, the top three supermarkets are all experiencing above-average growth of around 5%.

Market shares The latest supermarket market shares (in terms of consumer spending) as at 15th July 2007 were as follows:

  1. Tesco: 31.5%;
  2. Asda: 16.7%;
  3. Sainsbury's: 16.2%;
  4. Morrisons/Safeway: 11.1%;
  5. Waitrose: 3.9%;
  6. Somerfield: 3.8%;
  7. Aldi: 2.6%;
  8. Lidl: 2.2%.

Despite having a smaller market share, Waitrose's growth nudged ahead of the top three with top line growth of 6%, suggesting that consumer demand for premium retail goods is still growing.

Similarly, Iceland, Aldi and Lidl are also still enjoying good growth despite the general slowdown. Iceland's growth is coming through increased spending per shopper, while Aldi and Lidl are benefiting from increasing shopper numbers as both groups step up their new store opening programmes.

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