December marks a significant milestone for UK supermarkets as sales are projected to surpass £13bn, driven by Christmas demand.
- Sales growth is supported by a 2.5% increase in take-home purchases.
- Premium own-label products see a sharp rise in popularity among consumers.
- December 23rd is anticipated to be the busiest shopping day of the year.
- Despite rising Christmas dinner costs, grocery inflation remains stable at 2.6%.
As the festive season approaches, UK supermarkets are gearing up for a historic month with sales expected to top £13bn in December. This surge is attributed to increased demand for premium product lines as shoppers prepare for Christmas celebrations. Recent data from Kantar indicates a 2.5% rise in take-home sales for the four weeks leading up to December 1st. The allure of premium own-label products is particularly notable, with consumer spending on these items projected to jump from 5% to nearly 7% by month’s end.
In anticipation of Christmas, December 23rd is poised to be the busiest day for supermarket shopping this year. Fraser McKevitt of Kantar highlights a doubling in sales of products like sweet biscuits and cheese biscuits in November, with 8% of consumers already purchasing Christmas puddings. The momentum extends beyond food, as non-grocery items are also witnessing an upswing. Sales in this category observed a remarkable 21% increase in December 2023 compared to the yearly average.
However, the financial strain of the holiday season is evident in the rising cost of a traditional Christmas dinner. Feeding a family of four now costs £32.57, a 6.5% rise from the previous year due to higher turkey and vegetable prices. Despite this, grocery price inflation remains steady at 2.6%, as retailers focus on reducing prices through loyalty card discounts. Spending on price-cut offers has surged by 14%, totaling £355 million more than the previous year.
In terms of market share, Tesco and Sainsbury’s continue to lead the pack. Tesco’s share grew to 28.1%, its highest since 2017, with sales up by 5.2% over 12 weeks to December 1st. Similarly, Sainsbury’s saw a 4.7% increase in sales, raising its market share to 15.9%. Combined, these two giants account for 44% of the market. Meanwhile, discount retailers remain resilient, with Lidl achieving a 6.6% sales increase and Ocado outpacing the online segment with 8.7% growth, securing a 1.8% market share. In contrast, Asda faces challenges with a 3.5% decline in sales year-on-year.
As the festive shopping season intensifies, UK supermarkets are set to achieve unprecedented sales while managing the balance between inflation and competitive pricing.
