Tesco PLC (LSE:TSCO) shares fell after grocery market data showed its rate of sales growth slowing in recent weeks, while J Sainsbury PLC (LSE:SBRY) popped higher as growth held steady, though wider spending was curtailed due to pre-Budget jitters.
Grocery price inflation held steady at 4.7% last month, according to the Worldpanel supermarket till report from Numerator, formerly Kantar, with supermarket sales rose 3.4% over the four-week period, below the rate of inflation.
This partly reflected retailers increasing promotional activity in the run-up to Christmas.
Tesco's sales softened to 4.7% in the 12 weeks to 30 November, giving it 28.3% of the market, down from a 5.9% growth rate in the previous report.
Sainsbury’s sales rose 5.1% over the 12-week period, down from 5.2% in last month's report, giving it a market share of 16.0%.
Take-home grocery sales at Marks and Spencer Group PLC (LSE:MKS) increased 8.9%, up from 8.8% in the prior report.
Among the other major names, Asda sales fell 4.3%, worsening from 3.9%, to give it 11.5% of the market and keep it in third place, tracked by discounter Aldi at 10.5%.
Morrisons had 8.3% and is close to being overtaken by Lidl with 8.1%, with the German chain again recording double-digit sales growth.
Separate data from Barclays showed wider consumer spending weakening into November, with household card spending down 1.1% compared with last year, the steepest drop since February 2021.
The British Retail Consortium and KPMG Retail Sales Monitor also recorded a drop in growth, with total retail sales growth of 1.4% in November, down from 1.6% in October and the weakest in six months.
Like-for-like sales rose 1.2%, below expectations for 2.5%. Food sales increased 3.0%, while non-food sales rose just 0.1%.
Helen Dickinson, BRC chief executive, said the softer figures reflected “pre-Budget jitters” among shoppers and noted that online accounted for the highest proportion of non-food purchases since 2022. Fashion sales lagged, she said, with mild weather reducing demand for winterwear.
KPMG’s Linda Ellett said: “November delivered some growth in retail sales, but many retailers will be disappointed that Black Friday period promotions failed to deliver the bigger boost that they were hoping for.” She said computing and household appliances performed better than last year.
Shore Capital said the run-up to the 26 November Budget had been “a mass motorway pile up” for consumer confidence.
The broker wrote that “shoppers were worried and so not only were they low in confidence, but they also kept their purses in their wallets”, adding that the fall in Barclaycard spending was something “the Chancellor and her team should hold their collective heads in shame” over.
The broker said the 0.1% rise in non-food sales in November was “poor”, noting that clothing and footwear were weak in-store due to the mild autumn. It added that food sales growth of 3.0% suggested continued caution among shoppers, with price inflation the main driver of value growth.
Pantheon Macroeconomics economist Elliott Jordan-Doak said that retail growth fell “as fiscal worries led consumers to pull back on spending ahead of the Autumn Budget”. He added that heavy rainfall also weighed on activity, with BRC footfall down 0.8% year-on-year.