Why Morrisons, Iceland and Lidl led the way in a Christmas like no other

Nothing normal about this Christmas, was there? Given the impact of Covid and Brexit, it’s not easy to read the true performance indicators for 2021, but here goes. Starting with the punchline: Morrisons and Iceland shared the prize with sustained campaigns consistently delivering across the four-week and 12-week Kantar share performances.

They stood out in a festive season that saw spend increase across all the supermarkets. Remember total grocery multiples delivered a boosted 11.3% like-for-like growth over the 12 weeks. In the major players, Morrisons is the understated star of the season with 13.1% growth. This is the only performance in which I can take out all the mitigating and ‘so what?’ factors to reveal a genuinely well-planned, timely and seamless route to results. Predicting the willingness of consumers to splash out on higher value lines for their one-off Christmas celebration was a highlight.

Beyond the majors, the story of Covid Christmas is one of the ‘haves’ and ‘have-nots’ in online. Ocado’s 36.5% growth must get a mention, but the fact is they would have grown even more if capacity and M&S range limitations hadn’t held them back. It’s online, so of course they did well. So what?

Turn to discounters, where Lidl (up 15.3%) is claiming a big victory over Aldi (up 6.3%). I’m not convinced it’s a win for its laudable Lidl Plus loyalty scheme – this was more about the 25% coupon in December driving 18.8% growth in the past four weeks. The £10 off a £40 shop was on top of the 2% bonuses from its app. And it stole business from Aldi without doubt, reflected in both performance numbers. It was a bold move but a tactical one.

When you look for lasting results drivers, this was not a great indicator. I would still back Aldi in 2021 given the new store opening plan and the fact they are at least engaging with online though click & collect and Deliveroo. It’s a cheap way into e-commerce and not yet rolled out on a significant scale, but to prove what a discounter can do with good online capability just look at Iceland’s sustained 20% growth.

It takes nine weeks to create a habit apparently, so many shopper habits are expected to stick after 12 months of Covid. The big four believe that, and are relying on it because without Covid’s king trend – doubling of online share to circa 13% – they don’t need to be reminded of how fast they were losing to discounters. Vaccines might be here but consumer confidence is still low, according to Nielsen. And while that’s the case, the ‘online habit’ is becoming more entrenched.

Fashion batch retailers like Primark might be able to ignore it, but shopper-loyal grocery retail formats like Lidl certainly can’t. If they don’t invest in online they may need to coupon away their net profit again next year to cling to the share they win from simply being a discounter.