UK grocery stores see big Christmas bounce
United Kingdom supermarket sales soared by 1.8 percent for the 12 weeks ending 1 January, thanks in part to an uptick in premium purchases such as fresh seafood and smoked salmon during the Christmas season.
Shoppers spent a signficant GBP 480 million (USD 584 million, EUR 553 million) more at grocery stores for the quarter compared to the same period in 2015 – a record Christmas season, according to new data from Kantar Worldpanel.
“Year-on-year market growth has been helped by comparisons to a weaker Christmas in 2015, but sales were also buoyed by strong consumer appetite for festive celebration after a turbulent year,” said Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel.
Sales for the 12 weeks showed the fastest recorded growth since June 2014. Retailers’ premium own-label brands – including seafood items – helped spur the higher sales.
“Thanks to continued investment in premium own-label brands across the major retailers in 2016, such products finished the year with record 12-week sales of almost one billion pounds (USD 1.2 billion, EUR 1.15 billion). Top-tier lines, including own-label fresh and smoked fish, cooked meats such as ham, and wine performed particularly well,” McKevitt said.
In addition, Christmas Eve falling on a Saturday gave shoppers more time to buy food for their Christmas meals.
“The single busiest shopping day of the year was Friday, 23 December, with over half the population braving a grocery store,” McKevitt said. The typical household spend for December reached GBP 365 (USD 443.84, EUR 420.23), GBP 52 higher than the average month.
Sales at Tesco and Morrisons, in particular, increased during the quarter.
“Tesco’s recent sales revival continued with an increase of 1.3 percent, particularly helped by its performance within fresh food,” McKevitt said. However, Tesco’s market share from fell by 0.1 percentage points to 28.2 percent.
Meanwhile, Morrisons had a strong start to the year with growth of 1.2 percent – its first period of growth since June 2015, according to McKevitt.
Discounters Aldi and Lidl also realized healthy sales growth, as shoppers bought more of their premium products there, according to Kantar Worldpanel. Aldi’s sales grew by 11.8 percent year-over-year and Lidl’s sales increased by 7.5 percent.
Iceland sales increased by 9.6 percent for the quarter, Waitrose sales grew 3 percent and Co-op sales were up 2.4 percent. Conversely, Sainsbury’s sales dropped 0.1 percent, “Though it did deliver strong online sales growth having attracted new shoppers to the channel,” Kantar Worldpanel said.
There is additional good news for the U.K. grocery market for 2017. After 28 months of deflation in the market, like-for-like grocery prices have increased by 0.2 percentage point, signaling a return to inflation.
“The long-anticipated return to inflation suggests that the speed of growth in the overall market will continue to hasten in 2017, and both consumers and retailers will be looking at ways to avoid increasing the cost of the weekly shop,” McKevitt said.