Supermarkets ring up record Christmas despite slower growth

Supermarkets rang up another record Christmas, new data has shown, despite a slowdown in sector growth.

Shoppers spent a record £29.3 billion on groceries in the 12 weeks to December 30, which was £450 million more than this time last year, according to Kantar Worldpanel.

Asda came out top of the “big four” grocers with a 0.7% rise in sales, while Sainsbury’s was the weakest of the pack with a 0.4% decline.

Discounters Aldi and Lidl continued to put pressure on the established players. The two had a combined market share of 12.8%, the highest ever for Christmas.

Co-op was the only retailer to beat its 2017 growth rate. It also increased its market share for the seventh period in a row, a trend which is set to continue as it plans 100 store openings this year.

Market share of UK supermarkets
(PA Graphics)

But growth was slower as a lower level of inflation took its toll. The sector grew at 1.6%, its slowest rate since March 2017.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said the overall spend was tempered by lower inflation of 1.3%.

He said: “This slower inflation rate helped shoppers to manage their festive budgets, with 60% of customers looking to make savvier decisions to make their money go further over the holidays.”

New figures from Nielsen showed a similar trend, with overall grocery sales up 1.8% in the last four weeks, compared with 3.7% last year.

Mike Watkins, Nielsen’s UK head of retailer insight, put this down to changing consumer grocery shopping habits.

Christmas retail sales figures
(PA Graphics)

“It was a reasonable but not spectacular Christmas, indicative of how shoppers will now spread their Christmas spending across more retailers and different channels,” he said.

Retailers are now kicking off a January price war, with both Morrisons and Tesco slashing prices on core ranges and all of the big four cutting fuel prices.