Decline in butter puts brakes on the dairy market

Growth in the dairy market slowed to 3.1% in the last 12 weeks, down from 4.4% in the previous period. Despite marginal price rises, basket sizes continue to grow and remain the key contributor to the growth of dairy.

Grocery along with fresh and chilled experience a similar slow down with growth now at 1.8% and 1.4% respectively, compared to 2.5% and 2.2% last period.

Volume growth also eased this period with dairy down to 2.8% compared to 3.3% last period while fresh and chilled fell to 1.8%. Grocery remains stable at 1.5% volume growth with larger basket sizes, as seen across dairy also being the main driver of growth.

Commenting on the findings, Nishita Pattni, Client Executive, Kantar Worldpanel said: “The reduction in growth can be seen through all categories in dairy, most significantly in butter which saw growth fall by £7.7 million. Milk and margarine are also struggling with growth slowing by £4.7 million and £3.5 million respectively. With all sectors in a period of slowed growth, cheese stands out for experiencing the smallest slowdown in growth.

Pattni continues: “All retailers suffered with dairy sales slowing in the recent period except Co-Op and Lidl. Most notably Tesco saw sales decline by £10.3 million with Aldi also facing significant reductions in sales by £7.3 million. Tesco drives the decline of butter with sales reduced by £3.9 million. Sainsbury’s is also contributing with sales falling at £1.1 million for butter.”

Growth of non-promoted sales is the main factor contributing to dairy’s decline, with growth slowing by £25.6 million. This is echoed across butter where Y for X deals have been reduced by £7.2 million, largely driving the overall slowdown. All social classes see a similar level of decline across total dairy, but particularly the retired and pre-family life stages drive decline for dairy. Retired shoppers also struggle in butter as do young families.