UK supermarket sales growth picks up as consumers start Christmas shopping

By James Davey

LONDON (Reuters) - Sales growth at British supermarkets picked-up over the last month, helped by consumers starting to make purchases for Christmas, industry data showed on Wednesday.

Market researcher NIQ said UK supermarket sales rose 4.7% in the four weeks to Oct. 5 year-on-year, having been up 4.0% in last month's report.

"Many households are now budgeting for Christmas and slowly stocking their cupboards to help spread the cost," Mike Watkins, NIQ’s UK head of retailer and business insight, said.

The researcher's data, the most up-to-date snapshot of UK consumer behaviour, showed purchases of both Halloween and Christmas products drove sales growth of 0.2% in general merchandise - the first growth in that category in 12 months.

NIQ said shopper visits to supermarkets rose 7.6% year-on-year but average basket value fell 4% to 18.62 pounds ($24.34), reflecting lessening inflation.

Like data from rival market researcher Kantar last week, NIQ said online supermarket Ocado was again the fastest growing UK grocer with sales growth of 15.9% over the 12 weeks to Oct. 5.

Marks & Spencer was in second place with sales growth of 12.4%. NIQ said M&S attracted 800,000 new shoppers in the four week period year-on-year and over the 12 week period one in three UK households shopped at M&S for food and drink.

Market leader Tesco saw sales growth of 5.3%, while No. 2 Sainsbury's recorded growth of 5.5%.

However, No. 3 player Asda continued to struggle. Its sales fell 3.1% and it lost 1 percentage point of market share over the year.

Separately on Wednesday, official data showed UK inflation fell more than expected to an annual rate of 1.7% in September from 2.2% in August. Food inflation was 1.8%.

($1 = 0.7650 pounds)

(Reporting by James Davey; Editing by Shri Navaratnam)