Online sales at supermarkets are crumbling due to inflation and that might mean bad news for Ocado ahead of its fourth quarter trading statement, said Shore Capital.
Data from NielsenIQ showed that online sales fell 1.3% in the four weeks to 3 December, while store sales were up 9.3%.
Additionally, sales values grew 7.6% but volumes slipped 4.3% as inflation bit.
Shore noted that under normal circumstances, grocers would “bite an arm off” for 7.6% sales growth, but with food inflation at 15%, shoppers are being “more precise in their behaviour" regarding basket size, what they buy and how often they visit a store.
More trips from shoppers are evident, said Shore Capital, which is benefiting smaller outlets such as Co-op, while there has been an uptick in frozen goods purchases, a sign of trading down and snacks, sales of which were boosted by the World Cup.
This Christmas will be all about value over quality and availability, said Shore Cap analysts.
Nielsen's data showed discounters Aldi and Lidl continue to lead the way with sales growing at roughly 12% and well ahead of sales space growth of 5% on a 12-week basis.
Their combined share of the UK market is now up to 19.5%.
Asda, Sainsbury and Tesco continue to perform well, with Asda being the strongest posting sales up 7.7% in the 12 weeks, compared to 6.6% at Sainsbury and 6.5% at Tesco.
Morrisons, however, lags with sales down 3.3% as it drifts towards sixth, behind Lidl, in the league table.
On the premium side, Marks and Spencer continued to outperform Waitrose, with the latter “losing notable market share,” with sales down 1.5%.
Germans Aldi and Lidl will lead the way over Christmas but Asda, M&S, Sainsbury and Tesco are expected to broadly hold their share of the market.