Supermarkets had best Christmas for four years

Supermarkets had best Christmas for four years

Shoppers leaving it particularly late meant huge sales surge in week before the big day

London, 10 January 2017. Britons left their Christmas grocery shopping particularly late this year which meant supermarket sales in the week up to Christmas were “surprisingly strong” and resulted in the best Christmas trading period for four years.

Nielsen retail performance data released today shows takings at the tills for the four-week period ending 31st December rose +3.3%¹ versus the same period a year ago. This was the highest growth since 2012 (+3.7%) and a big improvement on last Christmas when year-on-year growth was flat (0%).

Shoppers delayed grocery purchasing to such a degree that it caused a huge surge in sales in the week ending Christmas Eve, with sales rising +22% compared to the same week last year, “helping to make it one of the biggest ever ‘end of year’ for supermarkets,” according to Mike Watkins, Nielsen’s UK head of retailer and business insight. Spend in that final two weeks alone was £5.9 billion.

“Shoppers left it particularly late this year, not only because there was an extra day to do the big Christmas shop but the mild weather meant there was no need to visit the shops to stock up in advance, which benefited larger stores in particular,” he said.

Watkins also attributes the strong performance to supermarkets simplifying their promotional strategies. The percentage of purchases that went on sales/promotional products dropped from 31% last Christmas to 27% this year – the lowest for six years. “Stronger communication on price cuts and less complicated promotions helped capture the seasonal and discretionary spend which had been ‘missing in action’ for much of 2016,” said Watkins.

Supermarkets also benefited from more in-store visits than last year, as consumers “shopped around for choice and range as well as the best prices.”

Alongside the rise in sales value, the volume of groceries purchased increased +2.1%¹.

All categories returned to positive sales growth, except for Household and Fresh Meat/ Fish/Poultry where deflation continued to impact sales.

Confectionery (+9.5%), Beers, Wines and Spirits (+5.7%), Deli/Cheese/Meats (+5.6%) and Soft Drinks (+4.3%) saw the strongest growth. General Merchandise (+2.5%) also bounced back after a Black Friday dip.

Aldi had the biggest year-on-year growth among the grocery retailers with sales up 17% in the four-week period and almost one million new shoppers compared to last year. “New ranges and more fresh foods meant shoppers were able to do a full Christmas shop this year at Aldi,” noted Watkins.

Among the Big Four, Morrisons had the largest year-on-year growth (3.4%) in sales, narrowly ahead of Tesco (2.7%). However, across the full 12-week period, Tesco came out ahead and was the only one of the top four supermarkets not to see a drop in market share.

It’s interesting to note that over the 12 weeks, Iceland (4.7%) was the third fastest growing retailer after Aldi and Lidl.

Watkins concludes, “The remarkable buoyancy in shoppers spending freely in the final two weeks of the year to enjoy the festivities was good news for retailers considering the consumer head winds expected in 2017 with the return of cost price inflation – after three years of deflation – plus the ongoing uncertainty about the impact of Brexit on UK grocery sales.”

Stephanie Cornwall
Stephanie Cornwall
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