Seafood price inflation reining in U.K. holiday spending

While U.K. grocers are expecting an uptick in chilled seafood sales right before Christmas, they recognize that December sales will likely not improve over last year.

Experts are forecasting a decline in the “big Christmas grocery shop,” Richard Watson, market analyst for Seafish, told SeafoodSource. “Although there is increasing shopper optimism driven by falling food inflation, shoppers are unhappy with the complexity and level of savings from promotions. They have retained their money-saving tactics, such as multi-store missions and cross-channel bargain hunting, while maximizing couponing and vouchers.”

Chilled seafood faces a tough sales proposition – even for Christmas – since it is a “relatively expensive protein choice,” Watson said. “Total seafood is experiencing a sustained period of price inflation. 2013 saw an increase of 6 percent against a background of falling food inflation.”
In fact, there has been a steady decline in the sales of seafood at Christmas over the last three years, according to Seafish. “This could be a short-term trend linked with the recession, as shoppers switch to cheaper options,” Watson said.

Despite the bleak forecast, retailers are taking strong Black Friday sales — as well as many shoppers’ growing interest in premium and sustainable seafood items — as a positive sign that there could be steady to increased food sales.

And an uptick in overall seafood sales for Christmas should benefit supermarkets’ fresh seafood sales for the month. “Chilled seafood sales always significantly increase over Christmas, along with an increase in frozen and a tiny increase in ambient sales,” Watson said.

What’s more, certain shoppers are willing to pay for high quality seafood. Since the recession started, shoppers have become polarized in their shopping habits, according to Watson. “On one side, entrenched moneysaving habits are the norm; but, on the other, shoppers are happy to spend money on high-quality, premium treats to keep up morale. Smoked salmon is probably one Christmas treat that shoppers are not willing to compromise on.”

And, while the recession has impacted grocery sales throughout the year, supermarkets have stepped up their fresh food marketing to augment year-end sales. U.K. retail sales — including food and non-food — grew 0.9 percent in November, compared to 2013, thanks to a rush of Black Friday shoppers, BRC-KPMG Retail Monitor found.

While food sales declined 1.2 percent in November, the performance improved from October, when sales fell 1.4 percent.

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