Diamond Jubilee adds sparkle to supermarket food and drink sales

BRITISH supermarkets received a 12.5 per cent sales boost from the Diamond Jubilee as customers stocked up on food and drink in the week before the celebrations.

The industry-wide figures released yesterday by market insight firm Nielsen came as Sainsbury’s reported modest sales growth in the last three months, falling short of City expectations despite a record week of trading before the Jubilee.

Nielsen said the seven-day sales boom in the week to 2 June built on growing momentum from the previous week as the Olympic torch relay kicked off a “summer of events”, while warm weather also helped sales. However, the cold and wet weather earlier in May caused “very subdued trading”.

Nielsen’s senior manager for retailer services, Mike Watkins, said: “Overall, May was a month of better momentum across food retailing, with the major supermarkets issuing a deluge of cash savings and discounts, actively encouraging shoppers to visit and spend.

“This has been a familiar pattern over the last six months. Promotional spend remains at 35 per cent of overall basket sales at the grocery multiples and we anticipate a continuation of these trends for the next three months.”

In a trading update for its financial first quarter, Sainsbury’s said sales in the 12 weeks to 9 June were up 3.6 per cent, or 1.4 per cent on a like-for-like basis.

Chief executive Justin King said the group was outperforming the wider market as a re-launch of its own-label range helped to match customers’ increasing focus on value.

“Customers continued the habit of savvy shopping to save money in order to be able to treat themselves on special occasions, shown by strong sales in the lead up to the Jubilee celebrations,” he said.

Sainsbury’s did not release specific figures for the week before the Jubilee, but King said it was a “record week outside of Christmas”. He stressed that the same quarter last year had been similar, with the Royal wedding also providing an extra bank holiday and mix of warm and cold weather, so the sales performance was building “growth on growth”.

He said: “We have delivered good sales growth in the quarter, in line with our expectations, helping our customers to manage both their weekly budgets, and to celebrate special occasions.”

But King admitted that, with inflation running at about 3 per cent in the sector, sales actually fell in terms of volume. He estimated that, across the sector, volumes fell by about 2 per cent last year and were on track for a similar drop this year, but he remained optimistic that a “unique” summer featuring the London Olympics should at least lead to some improvement.

Figures from Nielsen for the 12 weeks to 28 May suggested Sainsbury’s share of the UK grocery market remained unchanged from last year at 15.9 per cent. It was pushed into third place by Asda – up from 15.7 per cent to 16.3 per cent – while smaller rivals Aldi and Lidl continued to eat into Tesco’s dominant position.