British lockdowns drive acceleration in grocery sales growth

LONDON (Reuters) - The British grocery market saw sales growth accelerate to 12.2% in the latest 12-week period as reintroduced lockdown restrictions to stem the spread of COVID-19 caused people to spend more on food and drink, industry data showed on Tuesday.

Market researcher Kantar said the outcome for the 12 weeks to Jan. 24 compared to year-on-year growth of 11.4% in last month's report and reflected the curtailment of eating out of the home as cafés, restaurants and pubs were forced to close.

In January alone, shoppers spent 1 billion pounds ($1.4 billion) more on supermarket food and drink items compared with the same four-week period last year, Kantar said, with the average family spending 50 pounds more on groceries.

"Dry January also played a role in increased spend on no-alcohol beer, which grew by 12%. However, many sought to indulge and keep spirits high during a tough winter month and alcohol sales grew overall by 234 million pounds, an uplift of 29% on last year," said Fraser McKevitt, head of retail and consumer insight at Kantar.

Online shopping hit a record 14% share of the UK grocery market, boosted by a 229% year-on-year rise in the online spending by retired households.

Morrisons, Britain's No. 4 supermarket group, was the best performer of the four major players with sales growth of 14.3%.

Market leader Tesco, No. 2 Sainsbury's and No. 3 Asda, an arm of Walmart, saw growth of 12.2%, 12% and 9.9% respectively.

Kantar said UK grocery inflation was 1.3% over the 12 weeks. Prices are rising fastest in markets such as canned colas, skincare and chilled fruit drinks while falling in vegetables, fresh beef and rice/noodles.

Shares in Tesco, Sainsbury's and Morrisons have performed solidly in 2021 so far - up 5.2%, 7.5% and 1.4%.

They have been buoyed by expectations of continuing strong trading and by the failed bid by Canada's Alimentation Couche-Tard to acquire France's Carrefour which has shone light on the sector's value.

(Reporting by James Davey; Editing by Lisa Shumaker)