Grocers are heading into a Christmas of subdued sales growth, according to forecasting from global consulting firm AlixPartners.
The company’s UK Christmas Grocery Forecast predicts in-store food sales will see muted growth and be down in real terms once inflation is factored in.
Sales are forecast to be up 2.5% year on year in value but down 0.7% when adjusted for inflation.
The forecast encompasses the period from 1 October to 31 December – otherwise known as the golden quarter – and is based on analysis of UK ONS retail sales and consumer confidence data.
AlixPartners said the outlook mirrored its findings in a recent survey of 2,000 UK consumers on their intended spending for the festive holiday period.
The firm’s 2025 Global Consumer Outlook survey found only 13% planned to spend more on food this Christmas than last. Some 55% intended to spend the same amount as last year, while 21% planned to spend less.
“With the legacy of inflation continuing to bite and consumer confidence holding back spending, this Christmas is set to be a subdued affair for grocers,” said AlixPartners head of EMEA retail Matt Clark.
“Last month’s budget brought difficult news, with many preparing to take a significant financial hit as a result of the national living wage and National Insurance contribution increases. A good golden quarter has therefore become more important than ever.
“There is some hope on the horizon for the industry. The increase in the national living wage should create a small window of optimism for lower-paid customers, during which those consumers will feel more able to spend.
“This is an opportunity that grocers should grab, as it is unlikely to last given likely price increases as costs are passed on. Those businesses that can move fast and decisively may yet be able to retain or grow their share of wallet over the festive period.
The forecast comes days after latest data from Kantar revealed supermarket sales growth was still being driven by inflation.
Take-home grocery sales were up by 2.3% in value in the four weeks to 3 November at £11.6bn, alongside prices rising at exactly the same rate.
It means volume sales were flat in the period, despite the number of shopping trips hitting a four-year high, at 480 million.
Clark added: “The increased pressures on profits means it is unlikely that we will see a reduction in turnaround or transformation activity as we move into next year. In this vein, agility remains vital, with all businesses needing to be prepared to make tough decisions and to adapt and innovate at pace in the weeks and months ahead.”
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