We’ve grown used to supermarkets using Christmas veg as a loss leader, with 20p and 15p not abnormal in recent years, but in 2024 the price war entered new territory.
On 18 December came a day of intense undercutting. First Morrisons dropped the price to 10p, quickly joined by Asda. Lidl then went to 9p. Aldi followed. Then Asda went to 8p, soon matched by Aldi and Lidl.
Whether the move drove footfall is debatable, but it wasn’t the only way supermarkets lured shoppers this Christmas.
So what else did the supermarkets get up to? And how did it feed through to performance?
The sales figures quoted below are Kantar’s for the 12 weeks to 29 December, YoY
Tesco
Sales ▲ up 5%
Share ▲ up 0.8ppts to 28.5%
Tesco flexed the muscle of Clubcard, and a new feature it added to the scheme last April, offering more than 10 million personalised Clubcard Challenges over the festive period, generating a “record level of digital engagement”, according to the supermarket.
It also leveraged loyalty on Christmas veg, limiting its festive offer only to Clubcard – and calling the fact out loudly in stores – though it stuck at 15p.
Meanwhile, on social media, it played the charity card on its 12th annual ‘Winter Food Collection’, seeking donations for the Trussell Trust and FareShare. That didn’t do quite so well as the year before, generating 1.9 million meals compared with over two million.
But overall Tesco comfortably beat Sainsbury’s to deliver the fastest growth of the traditional big four, resulting in its highest Christmas market share level since 2016.
BRC analyst Manjari Dhar says it proves Tesco was the “best-in-class player in the UK food retail space” this Christmas.
Sainsbury’s
Sales ▲ up 3.5%
Share ▲ up 0.2ppts to 16%
Sainsbury’s entered Christmas 2024 with momentum thanks to its Next Level strategy over the past year. Those “strategic investments” in its stores and supply chain bore fruit, says Shore Capital analyst Clive Black.
Having beefed up its innovation arm, Sainsbury’s launched 300 new Christmas Taste The Difference products alone, boosting sales of the range by 16%.
Many of the key Christmas lines were offered with Nectar Prices, while over a million shoppers took part in ‘Count up to Christmas’, a gamified Nectar initiative promising points for completing tasks.
“Its price points have struck a chord with shoppers” helping it pull share from both ends of the market, says AJ Bell investment director Russ Mould.
Asda
Sales ▼ down 5.8%
Share ▼ down 1ppt to 12.5%
New boss Allan Leighton’s arrival in November always looked too late to save Christmas for the struggling giant, and even selling a 7ft pre-lit Christmas tree for £30 for loyalty card holders did not light up its performance.
The supermarket finished Christmas with the wooden spoon: the only mainstream supermarket (discounting Co-op) to see golden quarter sales fall year on year.
In its defence, Asda pointed to a slight bounce in sales in the four weeks to 29 December compared with the previous 12 weeks (as might be expected).
Its Winter Warmer initiative to help pensioners also continued to be a successful feature, with more than 250,000 meals dished out since November.
Yet as Shore Capital’s Black puts it, Asda’s Christmas “did not rock & roll”.
Aldi
Sales ▲ up 2.9%
Share ▲ up 0.1ppts to 10%
Aldi has so far been steadfast in its resistance to loyalty schemes, but it nevertheless launched a loyalty rewards campaign of sorts in December. Its ‘Big Advent Giveaway’ promised one customer each day would win back the cost of their shopping up to £100.
For a chance to win, customers had to email Aldi a copy of a receipt from a shop done earlier on the same day.
Aldi ramped it up later in December, promising another 10 winners in the final weekend before Christmas.
It also opened 11 stores in the final two months of the year, including four on 5 December.
And it made changes in store, adding more shelving to ease navigation and for the first time giving premium Specially Selected lines their own dedicated location, as well as adding 400 new products.
“For many years, Lidl have merchandised their Christmas seasonal range in one long run, creating ease of shopping, and it was interesting to see Aldi copy this with equal impact,” says IPLC’s Paul Stainton.
“But the attempt to deliver a loyalty campaign with their ‘Big Advent Giveaway’ felt somewhat weak,” he added.
Morrisons
Sales ▲ up 0.4%
Share ▼ down 0.2ppts to 8.6%
Suffering a major IT meltdown with two shopping days to go before Christmas was the last thing Morrisons needed. It was forced to issue apologies and offer More Card holders 10% off their whole shop on Christmas Eve.
The system issues meant customers had been unable to access loyalty discounts on their festive shop, while many faced cancellations and delays on online deliveries and click & collect slots.
Once the supermarket had things back under control, however, there were further hefty discounts on offer for More Card holders, with big savings on a variety of products if they spent £45 or more on a shop, in a deal that has been carried over into 2025.
However, industry commentators on social media called out availability issues for the reduced festive veg – with Morrisons tweeting the “good news” that it was increasing supplies. The messy heap into which its new-for-2024 ‘when it’s gone it’s gone’ offer descended was also noted. “Just not the answer. Who wants this?” said Grocery Insight’s Steve Dresser. Its 0.4% sales growth, was “a major red flag” in terms of its impact, Dresser added.
Lidl
Sales ▲ up 6.6%
Share ▲ down 0.3ppts to 7.3%
Lidl’s two best tricks with loyalty have been combining it with other strengths (free items from its in-store bakery are an example) and gamification.
It did both this Christmas, with its popular Lidl-branded jumper returning with an exclusive loyalty discount – deploying a feature it added to the scheme last May – and then with the return of an Advent Calendar campaign, promising discounts and giveaways “every day with our Lidl Plus Secret Boxes”, in the app.
“With 38% of their shoppers actively using the Lidl Plus App [NIQ May 2024], Lidl’s daily rewards will certainly have helped their Christmas performance,” says IPLC’s Stainton.
Co-op
Sales ▼ down 0.2%
Share ▼ down 0.1ppt to 5.3%
Just how well the Co-op did over Christmas is still hard to tell. The only evidence we have so far are the results from Kantar and NIQ. Kantar said the society’s sales were down 0.2% for the 12 weeks to 29 December while NIQ had Co-op sales up 2% in the four weeks to 28 December. Co-op has made now bones about its dissatisfaction with the Kantar read which it says does not reflect a significant chunk of its sales which are more impulse driven than take home. It also no longer issues its own Christmas trading update and so more details will not be available until publishes its full year results in April.
That being said, however, we can assume that the retailer was reasonably pleased with its performance based on feedback from its food MD Matt Hood. “We are a growth business, which has most recently seen our share of the convenience market reach nearly 14%, and we went into Christmas with that same energy,” he says.
“I’m delighted, as we focus on being the best small store operator, we were able to serve our 15 million customers, and six million members over the festive period with the products and services they needed, with Christmas Eve and New Years Eve as our biggest trading days of the year.
“Strong promotions, great value, keen pricing and a renewed focus on high quality products saw our customers buy into the products they rely on us for at that time of year: party food, mince pies, impulse, confectionary, crisps and alcohol – we sold nearly one million bottles of our Prosecco and Champagne in December, while Irresistible, our own brand premium range, saw double digit growth in quarter four, as shoppers upgraded over the festive period. As a convenience store, we were also there for top-ups, forgotten items and the essentials everybody still needs at Christmas and New Year – milk, bread, eggs, batteries, lemons.
“Alongside our bricks and mortar stores, our Q-commerce business saw significant interaction in December, building on our 26% share of that market, and our position as number one grocer on all our partner platforms.”
M&S
Sales ▲ up 8.7%
November saw M&S launch an ‘online food catalogue’, allowing shoppers to not only browse the range but check availability in their favoured branch.
It tempted shoppers with 500 new lines including very M&S-esque treats such as a new Mince Pie Liqueur and ‘Santa’s Workshop musical light-up biscuit tin’.
It made a flagship store opening – at Bristol’s Cribbs Causeway – the subject of a second run of the Inside M&S documentary on ITV in December.
It also grew food and drink sales faster than any other bricks & mortar supermarket.
But its supply chain couldn’t handle the stock flow challenge for smaller stores.
“A lot of our stores we’re at capping levels,” says M&S CEO Stuart Machin. “I was in stores Christmas week. You couldn’t get another delivery in and you couldn’t get down the aisles.”
As a result, some stores ended up with excess seasonal stock, leading to higher markdowns.
Waitrose
Sales ▲ up 2.1%
Share flat at 4.6%
Waitrose backed up a star-studded two-part ‘whodunnit’ Christmas ad with an interactive in-store campaign challenging shoppers to guess who stole the Red Velvet Bauble Dessert, deftly showcasing its premium No.1 range, which it relaunched in September. No.1 made up about a third of 554 new lines for Christmas.
But sales uplift was underwhelming (especially vs M&S), with online sales flat, and its Little Waitrose convenience stores falling, Kantar data shows. “I would still consider Waitrose to be in turnaround phase,” says a retail source.
Iceland
Sales ▲ up 1%
Share ▼ down 0.1ppts to 2.3%
Having had no Christmas ad in 2023, Iceland returned for 2024 with a throwback “That’s Why Santa Goes To Iceland” campaign fronted by This Morning star Josie Gibson.
Among 150 new festive lines was an ‘air fryer friendly Christmas Dinner in a Box’ to feed four for £25.
December saw it extend its ‘microloans’ scheme in time for Christmas, giving shoppers credit to spend in store.
It also gave the world its ‘first mince pie vending machine’ at a store in Liverpool, for a social media publicity stunt.
“On the one hand, Iceland may be disappointed,” says a source. “On the other, they wiped the floor with B&M-owned Heron Foods, the only other frozen retailer to have reported [sales down 5.6% in quarter three to 28 December].”
Ocado
Sales ▲ up 9.6%
Share ▲ up 0.1ppts to 1.8%
Ocado made December its 11th consecutive month as Kantar’s fastest-growing supermarket.
However, the absence of any Christmas figures in its own results this week (sales up 17.5% to £715.8m in Q4 to 1 December), “makes us suspicious momentum may have dipped a little,” says Shore Capital’s Black, though Kantar’s numbers ultimately suggest “a very commendable performance”.
It was the first of the supermarkets to make its Christmas slots available this year, in September, and says 4,000 customers were sitting ready at their computers at midnight.
Some were left disappointed though – several Ocado shoppers in London saw orders arrive without any turkey or trimmings (or any other frozen or chilled items) following a glitch at one of its CFCs.
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