British supermarkets celebrated a remarkable festive period as household spending on groceries reached unprecedented levels, driven by surging food price inflation which climbed to 3.7% in December, marking its highest point since March.
The latest data from market analysts Kantar reveals sales at major grocery chains rose by 2.1% during the four weeks leading to 29 December compared to the previous year. The increase was particularly influenced by food price inflation, which jumped significantly from 2.6% in November, propelled by rising costs in confectionery, skincare products, and juices.
Tesco maintained its position as market leader, achieving a 5% increase in take-home grocery sales over the three-month period, securing a dominant 28% market share. Sainsbury’s demonstrated strong performance with a 3.5% sales growth, whilst Lidl and Marks & Spencer impressed with increases of 6.6% and 8.7% respectively.
The festive period saw British households spending an average of £460 on groceries, with premium own-label products experiencing a substantial 14.6% growth. Branded goods also performed well, with sales accelerating by 4.2%. The champagne and sparkling wine category celebrated success, generating £187 million in December sales, representing a 4.4% increase.
Online grocery shopping reached new heights, with December digital sales totalling £1.6 billion. However, NielsenIQ analysts noted a slight decline in online market share to 11.9% from 12.5% year-on-year, as consumers increasingly sought value through in-store shopping, resulting in an 8% rise in physical store visits.
The data paints a concerning picture for Asda, which experienced a 5.8% decline in sales, emerging as the only major supermarket to report negative growth. This downturn highlights the challenges facing newly appointed chair Allan Leighton, as the retailer grapples with IT issues and intense price competition whilst managing substantial debt from its £6.8 billion buyout in 2020.
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