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European Grocery Sales Grow at Slowest Ever Pace as U.K. Slumps

  • U.K. supermarket price war dents sales, Nielsen says
  • Sales stagnate in France and Germany amid north-south divide

European grocery sales rose the least on record in the second quarter amid a U.K. price war and sluggish consumption in Germany and France, a study showed.

The amount spent on household goods increased by 0.8 percent from a year earlier, researcher Nielsen said in a report Wednesday. That’s about half the growth achieved in the first quarter, said Nielsen, which began recording the data in 2008.

“Northern Europe is today’s problem child," Jean-Jacques Vandenheede, Nielsen’s director of European retail insights, said by e-mail. “Southern Europe was often to blame for Europe’s poor performance but it’s currently doing quite well.”

Europe has come to depend on private consumption for economic growth as the uncertainty around Brexit weighs on exports. Euro-area expansion slowed to 0.3 percent in the three months through June and European Central Bank President Mario Draghi has held out the prospect of more stimulus if a slowdown weighs on inflation.

In the U.K., discounters Aldi and Lidl have dragged the country’s established supermarket operators such as Tesco Plc and J Sainsbury Plc into a price war that’s been raging for several years. The budget chains are also mainstays of a large discount sector in Germany, which accounts for about 40 percent of the market.

In France, low wage growth has meant that customers are “undoubtedly" shopping to a budget in the country’s grocery stores, said Charles Allen, an analyst with Bloomberg Intelligence.

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