December grocery sales reach record £12.8 billion

Grocery sales in December reached a new record at £12.8 billion, with year-on-year growth of 9.4 per cent, the fastest rate recorded since February 2021, figures from Kantar show.

For the 12 weeks to 25 December 2022, sales increased by 7.6 per cent.

Monthly grocery sales were £1.1 billion higher in December versus last year, which helped to breach the £12 billion mark for the first time.

“Value sales are up significantly but grocery price inflation is the real driving factor behind this rather than increased purchasing.  If we look at the amount people bought this period, sales measured by volume are actually down by one per cent year-on-year, showing the challenges shoppers are facing,” Fraser McKevitt, head of retail and consumer insight at Kantar, commented.

He noted that this has been the case across the traditional Christmas categories.  Value sales of mince pies soared by 19 per cent but volume purchases barely increased at all.  Christmas puddings were popular, growing by 16 per cent in value and six per cent in volume terms. Brussels sprouts were off the menu for some households as the proportion buying them fell to 45 per cent from 48 per cent.

The FIFA World Cup provided a boost for the take-home beer market, with England’s Quarter Final match against France on 10 December seeing sales hit their biggest daily takings of the year, surpassed only by the Friday and Saturday before Christmas when people stocked up on festive drinks.

Grocery price inflation now stands at 14.4 per cent, down slightly from 14.6 per cent in November, marking two consecutive months of falling rates.

“However, it’s still a painfully high figure at the current rate, impacting how and what we buy at the shops,” McKevitt added.

Consumers continued to trade down to supermarkets’ own label products this period, with sales rising by 13.3 per cent, well ahead of a 4.7 per cent increase in branded lines.

“These lines always do well at this time of year and this festive period was no exception with sales growing by 10.2 per cent to hit more than £700 million for the first time.  Tesco’s Finest range remains the single largest premium own label line by some distance, while Aldi and Lidl were the biggest contributors to the premium own label sector’s overall growth in 2022,” McKevitt explained.

The online grocery sector also remained in growth with value sales up four per cent year on year.  However, there was a slight decline in online’s total share compared to Christmas 2021, nudging down by 0.6 percentage points to 11.6 per cent. Inflation’s impact can be seen on this part of the market too as the average cost of a virtual basket now sits at £93.06.

The traditional grocers still captured most of the Christmas purchasing, with Tesco, Sainsbury’s, Asda and Morrisons accounting for more than two thirds of all spending.

Asda led this group, with sales up by 6.4 per cent in the 12-week period, closely followed by Sainsbury’s and Tesco which achieved sales growth of 6.2 per cent and 6.0 per cent respectively.  Despite sales falling by 2.9 per cent, Morrisons had its best performance since June 2021, standing the retailer in good stead for a return to growth in the new year.

Aldi remained the fastest growing grocer with 27.0 per cent growth taking its market share up from 7.7 per cent this time last year to 9.1 per cent.  Lidl’s sales increased by 23.9 per cent, moving its market share up by 0.9 percentage points to 7.2 per cent.

Symbols and independents have seen sales declining by 2.2 per cent in the 12-week period.