The average sales density of nine leading UK supermarkets has sunk 8.2% since 2010, the equivalent of £78.45 but in 2017 we forecast a 1.8% rise on 2016 to £878.46 – an extra £15.58/sqft versus last year.
Sales densities across the grocers have been under pressure due to shopper abandonment of larger stores, the growth of online, store openings leading to cannibalisation and food deflation. The big four have seen the largest declines in space productivity, with each opening over 18% more space between 2010 and 2017, proving detrimental to sales densities.
Note: data is for the retailer 2017 financial year end, retailers are in order of the highest sales density from left to right.
However, we expect to see a small improvement overall in 2017 – the first year-on-year growth in sales densities since 2010.
Significant investment in store refurbishments, an increase in customer facing staff, food price inflation and the closure of unprofitable stores will contribute to the rise. Moreover, the launch of third party concessions and food service counters in larger format stores will increase ATV and customer dwell time, improving space productivity despite consumers making more considered purchases in 2017.