In the immediate run-up to the EU referendum, supermarket sales were strong, according to data released today, but in the three month period before the vote, sales slipped.
The figures from Nielsen show that in the four weeks ending 18 June, UK supermarkets had their first increase in year-on-year takings since July 2015. Sales were up 0.4 per cent as compared to the same period a year ago.
However, grocery share figures from Kantar Worldpanel for the 12 weeks ending 19 June show the market is slipping into decline for the first time since January. Supermarket sales fell by 0.2 per cent as like-for-like grocery prices were down by 1.4 per cent on last year.
In morning trading, Tesco's share price was up 3.50 per cent, Sainsbury's was up by 4.30 per cent and Morrison's rose 2.12 per cent, as the stock market rallied somewhat after two days of steep falls in the aftermath of the EU referendum. Ocado's share price jumped as it delivered a 14 per cent sales rise.
Mike Watkins, Nielsen's UK head of retail, said: "It remains a tough trading environment for the big supermarkets but changes made over the last year in lowering prices, less promotions, edited ranges and improved customer service seem to be having an impact, alongside the drop in shoppers buying cheaper grocery brands to save money."
"Whilst the Brexit decision is unlikely to change shopper behaviour in the short term, we can expect some change in consumer sentiment and, possibly, a return to low inflation next year – should sterling’s depreciation continue and global commodity prices strengthen."
Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: "The decline is a continuation of the slow supermarket sector growth dating back to the summer 2014, primarily a result of cheaper everyday groceries bought about by a retailer price war.
"While these latest figures predate the EU referendum result, the immediate economic uncertainty is unlikely to cause a substantial fall in grocery volumes, as demonstrated by the 2008 financial crisis when basic food, drinks and household sales proved resilient.
"With an estimated 40 per cent of the food we consume sourced from overseas, any long term change in exchange rates may threaten the current period of cheaper groceries. Historically, higher prices have led to consumers looking for less expensive alternatives such as own-label products, seeking out brands on promotion or visiting cheaper retailers."
Jon Copestake, chief retail analyst at the Economist Intelligence Unit, said the Kantar figures "reflect a mixture of consumer uncertainty ahead of the EU referendum" along with the price competition between retailers.
Consumer uncertainty in the lead up to the referendum has been exacerbated by the lack of clarity over what is to come.
Grocery retail may be more inured than other retail sectors but it will still see a negative impact as rising import prices and consumer belt-tightening squeeze margins in both sides.
As as result it is difficult to anticipate anything but a worsening retail scenario along the same lines as what has come before.