Sales momentum remains weak across the grocery industry, with headline growth of +2.3% over the last four weeks, according to data released by Nielsen. However, despite the slow start to Christmas spending, we predict that grocery shoppers will spend £7 billion in the crucial two week period (ending 29th December). As with Christmas Eve lands on a Monday this year, it’s all still to play for, with potential growth of 4% compared with the same period last year if predictions are met.
The slow start to Christmas trading in 2018 has not been helped by shoppers being concerned about their personal finances: 43% feel that it’s not a good time to spend.* However, while consumer confidence is not very strong when it comes to big ticket items, retailers should be comforted by the fact that people are more willing to spend on food and drink.
We expect shoppers to spend on seasonal treats and indulgences as well as premium food and drink to enjoy the festive season with family and friends. This will provide some much needed sales momentum in particular for the big supermarkets and it seems shoppers are gearing up for a festive, and indulgent family Christmas with gin, pre-mixed alcoholic drinks, salty snacks (such as pretzels), hampers and lower alcohol beers all displaying strong growth at supermarkets in recent weeks.**
Retailers have been putting a real focus on increasing the frequency of visits that shoppers make to stores. The ‘little and often” shopping trend is just as important at Christmas and as shoppers tend to expand their store repertoire at this time of year, so now is the time for retailers to take the opportunity in the lead up to the holidays to make sure they’ve got all the festive favourites stocked alongside attractive offers.
In terms of retailer performance among the big four supermarkets, Asda was the fastest growing store (+1.5%). Morrison’s growth was flat (0%), while Tesco and Sainsbury’s were slightly down (-0.1% and -0.4% respectively).
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: The Conference Board® Global Consumer Confidence Survey is conducted in collaboration with Nielsen.
** Source: Scantrack Grocery Multiples, 4 weeks ending 1st December 2018