LONDON (Reuters) - Britain's decision to quit the European Union in last month's referendum has not had an immediate impact on grocery prices or the volume of goods sold, according to industry data published on Tuesday.
Following the "Brexit" vote on June 23, several surveys have indicated a sharp drop in UK consumer confidence. However, there is little evidence that has translated into lower spending.
Market researcher Kantar Worldpanel said overall UK grocery sales rose 0.1 percent year-on-year in the 12 weeks to July 19, while deflation was 1.4 percent.
"The EU referendum result has had no immediate impact on the prices retailers are charging or the sales volumes consumers are buying over the past 12 weeks," said Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel.
"The nation’s average shopping basket is 1.4 percent cheaper than a year ago, exactly the same level of deflation as reported last month, and it remains to be seen if the Brexit vote will bring about any price rises this year."
Some analysts think prices will rise as a drop in sterling following the referendum increase retailers' buying costs.
Rival research group Nielsen said the value of UK grocers' sales fell 2.4 percent year-on-year over the four weeks to July 16 - the worst figure since the four weeks ending July 19, 2014.
But it blamed the decline on wet and cool weather, rather than Brexit.
Kantar said market leader Tesco's sales fell 0.7 percent year-on-year over the 12 weeks, with its market share falling 0.2 percentage points to 28.3 percent - its slowest rate of share loss since March 2014.
Morrisons (L:MRW), the No. 4 player, produced its best result since January with a 1.8 percent sales fall - its figures still reflecting a wave of store disposals last year.
Asda, the British supermarket arm of Wal-Mart (N:WMT) that is No. 3 in the sector, remained the laggard with a 5.6 percent fall in sales. New chief executive Sean Clarke started at Asda on July 11.
No. 2 Sainsbury's (L:SBRY) saw sales fall 1.1 percent, partly reflecting a move to phase out multibuy offers.
German discounters Aldi [ALDIEI.UL] and Lidl [LIDUK.UL] recorded record market shares of 6.2 percent and 4.5 percent respectively, reflecting sales growth of 11 percent and 12.5 percent that is driven by store openings.
The industry's lower prices reflects the impact of Aldi and Lidl on the market and the market’s response, as well as deflation in categories such as pork, detergents and crisps.
Market share (percent) and sales increase/decrease (percent)
12 wks to 12 wks to pct change
July 17, July 19, in sales
2016 2015
Tesco (LON:TSCO) 28.3 28.5 -0.7
Sainsbury's 16.3 16.5 -1.1
Asda 15.5 16.4 -5.6
Morrisons 10.7 10.9 -1.8
Co-operative 6.4 6.3 2.1
Aldi 6.2 5.6 11.0
Waitrose 5.1 5.0 1.6
Lidl 4.5 4.0 12.5
Iceland 2.1 2.0 2.8
Source: Kantar Worldpanel