Despite pressure on wallets, premium own-label lines are still doing well
Retailers are ramping up promotions to encourage shoppers through their doors as the march to Christmas gets underway, with sales expected to top £13.6 billion in December.
The latest Worldpanel by Numerator data for November shows that 31.2 per cent of spending was on promoted items, up from 30 per cent this time last year.
Grocery price inflation held steady at 4.7 per cent over the month to 30 November, while take-home sales have risen below inflation by 3.4 per cent over the four weeks.
Fraser McKevitt, head of retail and consumer insight at Worldpanel, explained: “Retailers are pulling out all the stops to win shoppers over as they gear up for one of the most important trading periods of the year. One in five households tell us that they’ve been struggling financially and that’s been largely consistent over the past two years.
”With the cost of living still biting for many this Christmas, just under one third of all spending is on promotion as supermarkets find ways to shield shoppers from the impact of price rises.”
The emphasis on offers and lower pricing means that the cost of a Christmas dinner for four is a few pence cheaper than last year at £32.46. However, Worldpanel noted that retailers know that as well as keeping an eye on budgets, consumers also want to indulge during the festive season.
“Retailers are savvy to the fact that at Christmas especially – even when times are tough – consumers still find the space in their wallet to spend on small treats,” McKevitt said.
”In fact, we’ve seen that right through the cost-of-living crisis as people have found new, more affordable ways to indulge in what we call the ‘pick-me-up pound’. The rise and rise of premium own-label lines bears this out with one in every £20 now spent on these treat-type products.”
Rise of online grocery shopping
Online remains the fastest-growing part of the market with sales up by eight per cent in November to hit the second-highest-ever sales in a month since the pandemic high of February 2021.
Boosted by the online jump, Ocado reached a new record market share of 2.2 per cent, with sales increasing by 15.8 per cent over the 12 weeks to 30 November. However, bricks and mortar still dominates the grocery sector, and with Christmas falling on a Thursday this year, Monday 22 and Tuesday 23 December are expected to be the busiest shopping days of the year.
Driven by its ninth consecutive month of double-digit sales growth at 10.2 per cent, Lidl made the biggest market share gain, winning an additional 0.5 percentage points compared with last year to reach 8.1 per cent.
Sales at Sainsbury’s rose by 5.1 per cent, bringing the retailer’s market share to 16 per cent. Tesco grew sales by 4.7 per cent, as it attracted 321,000 more shoppers over the 12 weeks versus last year. Britain’s largest grocer now holds 28.3 per cent of the market.
Spending through the tills at Aldi increased by 4.1 per cent and its share remains at 10.5 per cent. Waitrose and Iceland both grew ahead of the market at four per cent, maintaining shares of 4.4 and 2.3 per cent respectively.
Sales at Asda now account for 11.5 per cent of the market, while Morrisons holds 8.3 per cent and Co-op’s share stands at 5.3 per cent. Beyond the grocers, sales of take-home groceries at M&S were 8.9 per cent higher over the 12 weeks compared with the same period in 2024.
