Slowdown in Grocery Growth at Christmas
While shoppers visited more supermarkets more frequently this Christmas, in a competitive retail environment, grocery sales growth slowed to +1.8% in the last four weeks, almost half the growth (+3.7%) enjoyed at the same time last year.
High levels of vouchering and price discounting encouraged shoppers to ‘chase the deal’ and visit a variety of supermarkets throughout December to help them spend less at Christmas. While the number of trips increased, the average spend per visit fell by -3% in the four week period (ending 29th December), compared with an increase of +3% in average spend in December 2017.
In contrast, sales in online grocery increased by +9%, to a 7.5% share of all grocery sales over the last 12 weeks. There was also a continued shift towards the discounters over Christmas, who hit 13.9% market share for the 12 weeks leading up to Christmas. Over the same period, Aldi sales increased by 11.7% and Lidl by 13.6%.
In the all-important last four weeks, there was improved sales growth at Tesco and Morrisons, while momentum at Asda and Sainsbury’s slowed.
As a result of promotional support, some of the best category growths across the four weeks leading up to Christmas were in key festive categories such as Soft Drinks (+5.8%), Confectionery (+5.5%), Crisps and Snacks (5.3%) and Beer, Wine and Spirits (3.8%), with savings being made in Meat/Fish/Poultry (-3.4%) and packaged grocery (-1.1%).*
We can attribute this slowdown in growth to several factors: consumer grocery shopping habits are changing, with many now opting to spend less on one single ‘big shop’, instead preferring more frequent, smaller trips to the supermarket, spreading the cost across multiple retailers to increase choice.
Moreover, with over half (57%)** of consumers not feeling confident about their finances, shoppers are more budget-conscious and the various promotions and price cuts are a response to help them manage their household budget. Finally, the incremental growth we have seen continues to come from the key categories of drinks, confectionery and snacks.
In all, it was a reasonable but not spectacular Christmas, indicative of how shoppers will now spread their Christmas spending across more retailers and different channels.
Table: 12-weekly % share of grocery market spend by retailer and value sales % change
All figures are from Nielsen Homescan Total Till unless otherwise stated.
* Source: Scantrack Grocery Multiples, 4 weeks to 29/12/2018
** Source: The Conference Board® Global Consumer Confidence Survey is conducted in collaboration with Nielsen.