Kantar is predicting that take-home grocery sales will surpass £13bn for the first time this December, driven partly by surging price inflation seen during the last year.
Latest figures showed that sales grew by 6.3% over the four weeks to 26 November to reach £11.7bn. While the rate at which grocery prices are rising is still well above the norm, the inflation figure dropped again last month to 9.1%.
With consumers buying an average 10% more items during December than in a typical month, Fraser McKevitt, head of retail and consumer insight at Kantar, said the scene was set for a “record-breaking spend through the supermarket tills this Christmas”.
He noted that retailers were also battling it out to offer value to consumers during this important month for trading, adding: “In a sign of just how fierce the contest is between the grocers, the cost of a Christmas dinner for four has risen well below the overall inflation rate this year at 1.3%, as some items on our festive plate have actually fallen in price.”
Retailers are putting the emphasis on own-label lines and promotions to attract people through their doors. Kantar data showed that spending on offers hit its highest level in over two years in the latest four week period at 28.4%. McKevitt commented: “The amount of money spent on deals usually leaps in the run up to Christmas, but this year is already looking a bit different.We’re well above 2022 levels, with customers making an additional £180m in savings this November versus 12 months ago.
“Brands have benefited from the boost in offers and have now edged ahead of their own-label counterparts, growing sales by 6.5% versus 6.4% for retailer lines. However, own-label is still doing incredibly well and premium lines especially so. These products are up by 15.4% year-on-year, with wine, chilled ready meals and fresh beef among the big winners last month. We’re likely to see a seasonal jump in premium stuffing, sausage meat and Christmas puddings over the coming weeks.”
Meanwhile, Kantar’s data shows that the two biggest supermarkets in the UK continued their fightback against the discounters in the battle for market share. Sainsbury’s delivered its largest share gain since March 2013, taking an additional 0.4 percentage points to reach 15.6%. Its growth was driven by the success of its own-label offer, with sales of its ‘Taste the Difference’ range up 23% year-on-year. McKevitt said: “These premium products feature prominently in Sainsbury’s Christmas TV spot this year, and our testing showed its lead TV ad is one of the top performers for potential short-term sales impact. We’ll be keeping a close eye on the numbers next month to see how this translates at the tills.”
Tesco also put in a strong performance last month to increase its market share to 27.5% following sales growth of 8.6%, marking the fifth month in a row that the UK’s largest retailer has made gains.
Lidl was again the fastest-growing grocer, boosting sales by 14.2% over the 12 weeks to 26 November to take a record high share of 7.8%. Aldi increased sales by 11.1% and now holds 9.6% of the market.
Sales growth remained weak at Asda and Morrisons, up by 2.6% and 3.7% respectively, with both losing share over the last year.
NAM Implications:
- Dinner has become the Christmas battlefield…
- And for those that can afford premium, promos are providing a way forward, especially for O/L.
- Probably causing a December peak that warns of a probable post-Christmas record dip…
- Morrisons and Asda will be the ones to watch in 2024, when high interest rates on borrowing will continue to bite.
- Meanwhile, the discounters continue to grow their share at the expense of all except Sainsbury’s and Tesco.
