Food sales growth slowed to its weakest levels since March 2008, largely reflecting lower food price inflation, according to new data from the British Retail Consortium (BRC).
Throughout the recession food has consistently been one of the best-performing sectors. But food sales growth has fallen to its lowest for 19 months, with food inflation tumbling since this spring. By contrast, most non-food sectors were well up on last year, albeit compared to poor figures in the corresponding 2008 period.
Overall UK retail sales values rose 3.8 per cent on a like-for-like basis from October 2008, when sales had fallen 2.2 per cent, due to turmoil in financial markets hitting consumer confidence. On a total basis, retail sales rose 5.9 per cent against a 0.1 per cent decline in October 2008.
Halloween food ranges were even more popular this year, helped by the festival falling on a Saturday. Confectionery, party food and drinks all did well, as well as pumpkins, sausages, burgers and bakery.
On the more autumnal days, home baking and casserole ingredients, roasting joints, root vegetables and traditional puddings showed good gains. Shoppers continued to look for value lines and good deals, but some also noted signs of indulgence purchases and trading up.
Joanne Denney-Finch, chief executive of the IGD, said: “After a period of sustained inflation, food prices are levelling off. Food price increases have slowed consistently since February 2009, providing relief for hard-pressed shoppers, with retailers working hard to pass on the benefits of more stable commodity markets.
“The contest for Christmas has started in earnest, with leading operators highlighting both grocery and non-grocery lines in their advertising. Both retailers and suppliers continue to promote heavily, price cutting and flexing their ranges to meet shopper needs as we head into the UK’s second ‘Recession Christmas’ in a row.”
Stephen Robertson, director general of the BRC, said: “With less than 50 days to go before Christmas, retailers will be hoping improved consumer confidence will be sustained during the festive period and beyond. Shops have already started to battle it out for customers with a string of promotions and discounts. But 2010 has many uncertainties, including the likelihood of rising unemployment and tax increases.”
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