Latest data from NIQ shows that total till sales growth at the leading UK supermarkets slowed to 6.8% (from +8.7% the month before) during the four weeks to 2 December as inflation continued to ease and consumers delayed their spending in preparation for the big Christmas shop. In the seven days to 24 December, shoppers are expected to spend up to £5bn, making it the biggest ever week for food sales.
The figures also reveal a significant increase in promotional activity (25%), up from 23% last year. NIQ noted that this has been well received by shoppers as 38% of branded sales across all FMCG goods in the four weeks were purchased on promotion and 16% of own-label, pushing promotional spend to the highest level since the start of the pandemic in February 2020.
Meanwhile, there was strong value sales growth (+8.2%) for online grocery shopping compared to in-store (+5.3%), boosting online market share from 11.2% to 11.5%. This growth was in line with NIQ predictions for the Christmas period as consumers look for ways to plan their shopping in advance, budget for their Christmas shop as well as the colder weather discouraging shoppers from visiting stores.
The data also shows that volumes were a little weaker this month, down 0.9%, as shoppers remained concerned with rising household and energy bills. NIQ said shoppers were still prioritising value and are taking advantage of promotions to stock up for the festive period.
Sales for meat and poultry soared (+10.1%), making it the fastest-growing category, and strong confectionery sales (+10.2%) indicated that shoppers were still treating themselves. This helped make up for a 7% fall in general merchandise sales at the major supermarkets as shoppers looked to save money to spend at Christmas.
In terms of retailer performance, Sainsbury’s (+9.5%) was the best-performing supermarket of the traditional ‘big four’ over the 12-week period. Lidl (+17.3%) and Aldi (+14.3% ) continue to maintain their position as the fastest-growing retailers, with M&S (+12.8%) and Ocado (+11.7%) also showing steady growth.
Mike Watkins, NIQ’s UK Head of Retailer and Business Insight, commented: “We know that almost three quarters of households think retailer promotions are important when choosing where to make their grocery shop at Christmas. NIQ research also shows that loyalty points play a significant role in helping shoppers save money over the festive period, with over half of shoppers looking for personalised loyalty card prices and promotions and 38% cash in loyalty points saved throughout the year.”
He concluded: “The good news is this will help shoppers celebrate the festive season and treat themselves to some premium food and drink and seasonal indulgences, but this year value for money will be even more important. The key for retailers is to get the basics right to dish up a successful Christmas; low price, quality, and availability are the top drivers that are important to shoppers when planning where to do their main Christmas grocery shop.”
NAM Implications:
- Tesco and Sainsbury’s continue to grow share at the expense of Morrisons and Asda.
- While Aldi and Lidl continue to outperform the mults.
- Do your trade strategies reflect these market changes?
