Supermarkets have had their best Christmas trading in four years thanks to a late surge in sales.
Last month, British Baker reported that supermarket sales of Christmas cakes and puddings – and many other festive favourites – were trailing last year’s. At the time, retail analysts said they expected to see a strong performance in the final week before Christmas.
Nielsen sales figures published today (10 January) show supermarket sales for the final four weeks of 2016 were up 3.3% on a year ago. This was the highest growth since 2012, when sales rose 3.7%.
Shoppers had delayed their festive grocery purchases to the last minute, according to Nielsen, with sales in the week up to 24 December up 22% year on year.
“Shoppers left it particularly late this year, not only because there was an extra day to do the big Christmas shop, but the mild weather meant there was no need to visit the shops to stock up in advance, which benefited larger stores in particular,” said Nielsen UK retailer and business insight head Mike Watkins.
He added that simplified promotional strategies had also benefited retailers, with the percentage of purchases on promotional products down from 31% last Christmas to 27% this year – the lowest for six years.
“Stronger communication on price cuts and less complicated promotions helped capture the seasonal and discretionary spend which had been ‘missing in action’ for much of 2016,” said Watkins.
Aldi had the biggest year-on-year festive growth, with sales up 17%.
“New ranges and more fresh foods meant shoppers were able to do a full Christmas shop this year at Aldi,” noted Watkins.
Morrisons – named In-Store Bakery of the Year at last year’s Baking Industry Awards –- had the strongest Christmas performance of the ‘big four’ supermarkets according to Nielsen. Its sales were up 3.4% year on year in the four-week period, followed by Tesco at 2.7%.
Tesco came out ahead across the past 12 weeks, however, with Nielsen figures showing it was the only one of the ‘big four’ not to lose market share (see table below).
In a trading update released by Morrisons, the retailer said it had enjoyed its best Christmas in seven years.
Morrisons added it had benefited from a strong performance by its new Best range, with more than half of customer baskets including at least one Best item.
“This Christmas we made further improvements to the customer shopping trip,” said Morrisons chief executive David Potts. “We stocked more of what our customers wanted to buy, more tills were open more often, and product availability improved as over half of sales went through our new ordering system. Both like-for-like and total sales grew, which was very encouraging.”
Retail analyst firm Kantar Worldpanel, which has also published supermarket trading figures for the festive period, said supermarkets had benefited from continued investment in premium own-label brands.
“Such products finished the year with record 12-week sales of almost £1bn,” said Kantar Worldpanel retail and consumer insight head Fraser McKevitt. “Top-tier lines – including own-label fresh and smoked fish, cooked meats such as ham, and wine – performed particularly well.”
Kantar data also showed a 0.2% increase in average retail prices after 28 months of deflation.
“The long-anticipated return to inflation suggests the speed of growth in the overall market will continue to hasten in 2017, and both consumers and retailers will be looking at ways to avoid increasing the cost of the weekly shop,” added McKevitt.