Festive sales: the winners and losers of Christmas 2023

Christmas 2023 was the busiest for retailers since 2019, as Brits made 488 million trips to supermarkets over the four weeks to 24 December, spending a record £13.7bn – £477 per household.

The latest numbers from Kantar preceded a string of trading updates from major retailers this week. So which of them look to be festive winners?

 

Tesco

Tesco’s UK & Ireland sales growth for the 19 weeks to 6 January was 6.9%.

Tesco UK sales were up 7.5% in the 19 weeks (7.9% in its third quarter and 6.8% in the six-week festive period), while its 19-week sales in ROI were up 7.3%, and Booker 4%.

Tesco CEO Ken Murphy put what the supermarket claims to be its best Christmas yet down to a “relentlessness on value”.

The supermarket claims it has now been the cheapest full-line grocer for more than 14 months on the trot, using Clubcard Prices to maintain and grow share despite pressure from the discounters.

However, Tesco also scored over Christmas at the premium end, with Finest sales up 16.7%.

Its online sales were up 11.5% in the 19 weeks, with almost half a million orders on its new rapid delivery service Whoosh.

The supermarket began 2024 with price cuts across 150 staple products, while claiming to have reduced prices on nearly 2,700 products in the past year, despite the cost of living crisis.

Tesco is also offering double points on Clubcard for the next seven weeks – the first time it’s launched such a campaign for a decade.

“We are in a fight for every single basket,” said Murphy.

Shareholders will be sharing the supermarket’s festive joy after Tesco upgraded its FY23 guidance to £2.75bn, from a previous range of £2.6bn-£2.7bn.

Bernstein analyst William Woods says Tesco is growing “well ahead of consensus expectations”.

“The strength has further come through for the Christmas trading period where the outperformance vs expectations was even stronger,” he says.

GlobalData senior retail analyst Eleanor Simpson-Gould says: “Tesco’s results reflect an empowered strategy focus, upscaling the long-established Clubcard scheme and improving product innovation to fend off discounters, which has been a cornerstone in Tesco’s year of consistent sales growth.”

 

Sainsbury’s

Sainsbury’s grocery sales grew 9.3% in the 16 weeks to 6 January and 8.6% in the six weeks to the same date, driven by demand for its premium Taste the Difference range – which grew volumes by 13%.

Nectar Prices – which ran at Christmas for the first time – also helped attract customers, with participation rates reaching 90% among those who were doing an £80 weekly shop.

Sainsbury’s also enjoyed its “best year ever” for mince pies, with sales increasing 20%, despite Kantar figures showing volumes of the product fell by 4% sector-wide.

Sales of Sainsbury’s premium Taste The Difference cheese were also the highest on “record”, the retailer said.

It’s testament to the success of Sainsbury’s ‘food first’ strategy, which has helped it pull market share from both ends of the sector, suggests AJ Bell investment director Russ Mould.

“Sainsbury’s used to sit in a difficult position – too expensive for people with limited resources and not attractive enough versus Waitrose for wealthier individuals. Prices have since been cut and its Taste the Difference ‘posher’ range is now having broader appeal.”

The growth in Christmas food spend was offset slightly by declines in general merchandise (down 3.7%) and clothing (down 6%).

 

Aldi

Aldi and Lidl were first out of the gates with Christmas sales trading updates, at 7am on 2 January. In a familiar narrative, Aldi boasted of its “best-ever Christmas”.

Sales increased 8% year on year in the four weeks to 24 December, topping £1.5bn for the first time.

Friday 22 December was its busiest trading day ever as it served 2.5 million customers.

Alternative roasts proved particularly popular, with Specially Selected Crackling Gammon Joint up 25%.

Aldi UK & Ireland CEO Giles Hurley took the opportunity to reaffirm Aldi’s commitment to value. “As we look ahead to 2024, our promise to customers is that they will always make significant savings on every shop with Aldi because we have the lowest grocery prices in Britain,” he said.

Against 6.7% grocery price inflation in December [Kantar] and factoring in the contribution of new stores in 2023, not everyone was impressed.

“We sense management will be disappointed with what look to us like negative like-for-like sales volumes,” says Shore Capital’s Clive Black.

 

Lidl

Lidl’s update also told of a “record-breaking Christmas”, as it notched up a 12% year-on-year increase in sales in the four weeks ending 24 December.

An extra 4.5 million people shopped with Lidl in December, and sales of its premium Deluxe range were up 11%, while prosecco sales shot up 45%.

“Deluxe proved to be a standout winner this Christmas with record-breaking sales as we saw customers not only start their festive celebrations early but trade up to premium lines across all categories,” said Lidl GB CEO Ryan McDonnell.

Lidl cited Kantar to boast of being the only grocer to take spend from all competitors in the four weeks, amounting to £116m in total – including £12.2m from Aldi.

Factoring in inflation and stripping out Lidl’s new stores (25 in 2023 – about five fewer than Aldi), Shore Capital’s Black views it as a “Christmas winner”.

“We arrive at circa 4% volume growth,” he adds.

 

M&S Food

Tipped by analysts as a Christmas winner, M&S didn’t disappoint, in a trading update revealing near double-digit like-for-like growth in food.

Total food sales were up 10.5% in the 13 weeks to 30 December, with food like-for-likes up 9.9%.

Kantar data disclosed by M&S had the retailer as the top-performing grocer in volume growth terms in both the four weeks and 12 weeks to 24 December, with an uptick of about 7%.

M&S Food’s market share in December “went to over 4.8%, which for us is pretty significant growth”, M&S CEO Stuart Machin told journalists.

He said M&S had “taken share from some of the competition” including Waitrose. 

The strong performance was not limited to Christmas lines but also seen in core grocery, he said.

“We never used to be well known for core grocery, but our grocery sales were up 24% on last year,” said Machin.

“Our household core items were up 30%-plus from last year.

“Salads, fruit, vegetables, fresh poultry, prepared veg – all of those core categories were up more or less double-digit.

“Our food business is becoming a different food business – it’s not just for Christmas.” he added.

 

B&M

B&M UK saw total sales rise 3.7% to £1.35bn in the 14 weeks to 30 December, with like-for-likes up 1.2% against “strong comparatives” a year earlier.

The retailer’s frozen food chain Heron Foods saw sales rise 11.4% to £144m.

B&M CEO Alex Russo called the golden quarter performance “pleasing, with strong operational execution” across the business.

A note from Peel Hunt agreed it was a “good effort” against tough comparatives, adding: “The greatest strength came in general merchandise.”

The update also said B&M was on track to have opened 45 new UK stores by the end of the financial year.

 

Fortnum & Mason

Fortnum & Mason sales for the five weeks to 24 December were up 17%, reflecting that shoppers will still splash out for “affordable luxury” and “extraordinary” food and drink that can be given as gifts, according to CEO Tom Athron.

He admitted Christmas “came late”, with the rush not getting started until after Black Friday. However, when it hit, “record” numbers of people shopped at its Piccadilly flagship store, as well as online, including those using its recently relaunched EU delivery service.

 

Majestic Wine

Specialist wine retailer Majestic said Christmas 2023 was its best ever, with sales rising by 8.1% in the eight weeks to 25 December.

More than 60,000 new shoppers visited a Majestic store for the first time during this period, while fine wine sales also jumped by 13.4% as customers traded up over the festive season.

Friday 22 December was the “biggest day of trading in Majestic’s 43-year history,” with shoppers leaving it until the last minute to stock up on festive booze supplies.

Majestic said its performance was boosted by opening six new stores during 2023, alongside a “strong performance” from its B2B division, Majestic Commercial, which now serves 2,300 restaurants, bars and pubs across the UK.

Booths

Booths enjoyed “record” Christmas sales, as demand for traditional festive staples saw basket spend and customers numbers rise across its 27 stores.

Customers came for a “very traditional British Christmas” Booths said, with demand for turkey and poultry, pigs in blankets and smoked salmon rose 10.6%, 9.7% and 34% respectively. Sales of traditional mince pies grew by 16%.