Predictions on how much consumers in the U.K. will spend on groceries this holiday season are mixed.
U.K. research firm GlobalData said it expects consumers to spend more on food and non-food items in the fourth quarter, driving spending up 3.4 percent to GBP 109.7 billion (USD 133.5 billion, EUR 123 billion).
While spending will be higher, it is barely half of the 6.2 percent growth achieved last holiday season, when people were able “to celebrate properly for the first time in two years following the relaxation of Covid-19 restrictions,” GlobalData said.
The prediction would mark a second consecutive quarter of slowing growth in 2023, with the increase down from a peak of 5.2 percent in the Q2 2023.
“This year’s growth in retail sales is driven by inflation, which GlobalData expects to reach 9.3 percent for the year as a whole,” GlobalData Lead Retail Analyst Nick Gladding said. “Sharply higher prices mean shoppers will spend less in real terms than last year, choosing either to trade down or trim the number of presents they buy.”
Britons’ savings are depleted by cost-of-living increases and mortgage rate hikes, so consumers are likely to shop more cautiously and more savvily, Gladding said.
“This year, GlobalData expects a record number of shoppers to shop at discounters as their keen pricing and strong seasonal offers attract high levels of footfall,” Gladding said. “Discounter expansion is forcing the competitor set to raise their game and emphasize quality and breadth of range.”
That goes along with a trend research firm Kantar reported in September, finding Aldi’s U.K. sales soared 17 percent in August compared to the previous year, and Lidl’s sales rose 16 percent. The two discounters now account for 17.7 percent of all grocery sales in the country.
GlobalData said it expects food and grocery to grow faster than others this year, with shoppers spending 5.9 percent during the Q4 2023 than they did last year.
“This reflects the impact of price increases over the last 12 months outweighing any recent month-on-month declines,” Gladding said.
Tesco also said in its Tesco Christmas Report 2023 that 31 percent of consumers want to have a bigger holiday celebration than last year.
“This is being driven by the nation’s love for festive food, with 30 percent saying Christmas food and drink has never been more important,” Tesco said in a press release.
Consumers told Tesco they want a traditional Christmas “with lots of nostalgic influences,” including prawn cocktail, smoked salmon, and trifle.
While seafood is a part of the overall celebration, Tesco’s report found meat will still be the centerpiece on 79 percent of Britons’ dinner tables, up 5 percent compared to last year. Nearly half (48 percent) of consumers will serve turkey on Christmas Day, following by 11 percent who will serve chicken, 6 percent who will have roast beef, 4 percent who will feature lamb, and 2 percent who will serve steak.
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