Consumers to set aside confidence concerns to indulge over Christmas

Consumers are refusing to let Brexit uncertainty curtail their festive food plans as supermarket figures show signs of a “bumper” Christmas ahead.

Sales of chocolates and Brussels sprouts have already reached £292 million and £18 million respectively, with overall Christmas spending in December expected to reach £10 billion to set a new record, Kantar Worldpanel said.

Despite an uncertain political climate taking its toll on consumer confidence, shoppers are still spending on more expensive goods, with total premium own-label lines growing at 5.5%.

Over November, sales of festive favourites jumped. More than one in eight households have already brought a Christmas pudding, while Brussels sprout sales have reached £18 million. #GroceryMarketShare @K_Worldpanel

— Kantar (@Kantar) December 11, 2018

However, the overall grocery market grew at just 2% as the colder weather deterred shoppers over the 12 weeks to December 2 – its slowest rate since March 2017 – as inflation fell to 1.6%.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “The last time Christmas Day fell on a Tuesday was in 2012 and the Saturday before was the busiest shopping day of the year. We expect the same trend to hold true this year, with Saturday 22 December pulling in the last-minute Christmas crowds.

“Because of the way Christmas falls, grocers have an extra trading day this year meaning overall sales in December – up to and including Christmas Eve – could reach £10 billion.

“There are already tell-tale signs of a bumper Christmas: over the month of November, sales of festive favourites jumped as shoppers began stocking up in preparation for Christmas. More than one in eight households have already bought a Christmas pudding, while boxed chocolate and Brussels sprout sales have reached £292 million and £18 million respectively.”

Both Aldi and Lidl saw double-digit growth over the last 12 weeks, with Aldi’s market share rising by 0.7 percentage points to 7.6% and Lidl’s share jumping 0.5 percentage points to 5.6%.

Asda led the big four with sales growth of 1.5% to hold market share at 15%, while Tesco and Sainsbury’s both saw sales fall by 0.1% and 0.2% respectively.

Analysts Nielsen also said retailers could see 4% growth on last year if shoppers spend a predicted £7 billion in the crucial two-week period to December 29.

Despite weak consumer confidence in relation to spending on big ticket items, Nielsen said retailers should be comforted by the fact that people were more willing to spend on food and drink.

Mike Watkins, Nielsen’s UK head of retailer insight, said: “It’s been a slow start to Christmas in 2018, and in particular for the grocery multiples.

“The good news is that we still expect shoppers to spend on seasonal treats and indulgences as well as premium food and drink when shopping and to enjoy the festive season with family and friends. This will provide some much-needed sales momentum in particular for the big supermarkets.”