Supermarket sales hit a record high of £14.6bn in the three weeks leading to Christmas thanks to the highest level of promotions seen in store for three years, according to new figures released this morning.
Total till roll growth slowed down at the mults in the four weeks to 28 December, with sales up 3.2% compared with a 3.7% rise in the previous month, NIQ revealed today.
After a slow start to the month, food sales rallied in the final three weeks before Christmas, helped by “intense discounts and increased promotional activity”.
NIQ data showed that 27% of all fmcg sales were purchased on promotion, with 37% of this being driven by brands. Tesco and Sainsbury’s led the way, attracting consumers into stores with “big” loyalty app savings.
However, in the past four weeks, shoppers put fewer items in their baskets, with an average value of £21.95, down 4.9% compared to last year. NIQ said it suggested shoppers were still bearing the brunt of the high cost of living. This is despite dissipating food inflation at 1.8% compared to 7.8% a year ago.
Ocado took the title of fastest-growing retailer over the four-week period, registering growth of 13.9%, despite a decrease in online share of sales.
The discounters were the fastest-growing channel, with an increase of 5.5%. Aldi and Lidl’s combined market share increased to 16.3%, up from 15.8% a year ago. In contrast, trading over the past four weeks was more challenging for the convenience channel, which only managed growth of 2.4%.
Tesco grew market share to 26.8% as sales increased by 4.5% over the festive period, while Sainsbury’s held share steady at 15.4% on sales growth of 3.1%. The two biggest supermarkets benefitted from strong increases in visits and new shoppers, according to NIQ.
Momentum at M&S also continued, with sales growth of 6.8% pushing the retailer to its highest-ever market share of 4.8%.
Asda lost share - falling from 13.2% a year ago to 12.2% - as sales declined 4.2% year on year. Morrisons also saw share drop to 8.6% on a 1.9% fall in sales.
Waitrose maintained its market share of 4.1% as it registered sales growth of 2.7% this Christmas.
“In the last four weeks we’ve seen the highest levels of promotions in the last three years, with 27% of all fmcg sales being purchased on promotion, with branded promotions at 37% of sales,” said Mike Watkins, NIQ UK head of retailer and business insight.
“This has no doubt helped to boost purchasing over the Christmas period. In particular, this was led by Tesco and Sainsbury’s where promotional spending on fmcg increased to 35% and 34% respectively as these retailers engaged shoppers with big loyalty app savings.
“Overall, it was a good Christmas for most food retailers with sales growths in line with the expectations that had been set in the last three months. The topline growths were helped by the return of low inflation but also by shoppers being inclined to buy more in the final week leading up to Christmas Eve. However, shoppers still had to spend more money this year on household bills before buying Christmas indulgences and this may have taken the edge off the growth in some other categories such as alcohol and also household.”
With shoppers purchasing items to celebrate the festive season with family and friends, NIQ data showed there was a significant boost in sales for sushi (+20%) and olives & antipasti (+10%), as well as chilled bread (+12%), nuts (+10%) and fresh & frozen fruit (+10%).
There was also strong growth across the major supermarkets for fresh produce (+7.4%), bakery (+4.8%) and soft drinks (+3.6%). Sales for meat, fish & poultry also fared better than the same period last year – with value growth up 4.4% and 2.1% in unit growth. Confectionery also did well with 13% value growth and a 5.5% boost to volumes. Health & beauty also performed well, with sales growth of 6.3%.
Sales for beers, wines & spirits fell flat, with value declining by 1.6% on volumes down 1.3%. However, sales rose for stout (+13%), which NIQ said was “maybe influenced by the challenges around draft supply of Guinness to pubs”.
“Looking ahead to 2025, we expect shoppers to keep managing their budgets by shopping smart and shopping around for wherever the savings are the most attractive,” Watkins added. “This means that shopping ‘little and often’ will continue with omnichannel shopping becoming an even bigger consumer trend across the industry.”
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