In-store food sales will see muted year-on-year growth over the festive period, states a new report, claiming that this year, Christmas is set to be a subdued affair for grocers as inflation continues to bite.
According to UK Christmas Grocery Forecast released by consulting firm AlixPartners, in-store sales this Christmas are expected to increase by 2.5 per cent in value terms. However, when adjusted for inflation, this figure becomes a 0.7 per cent decrease.
The forecast, which is based on AlixPartners’ analysis of UK ONS retail sales and consumer confidence data, mirrors findings from the AlixPartners 2025 Global Consumer Outlook, which recently surveyed 2,000 UK consumers on their intended spending for this holiday period. The outlook reveals that only 13 per cent of British consumers are planning to spend more on food this Christmas than last Christmas. 55 per cent intend to spend the same amount as last year, while 21 per cent of British consumers intend to spend less.
Matt Clark, Head of EMEA Retail at AlixPartners, commented, “With the legacy of inflation continuing to bite and consumer confidence holding back spending, this Christmas is set to be a subdued affair for grocers. Last month’s Budget brought difficult news, with many preparing to take a significant financial hit as a result of the National Living Wage and National Insurance Contribution increases. A good ‘Golden Quarter’ has therefore become more important than ever.
“There is some hope on the horizon for the industry. The increase in the National Living Wage should create a small window of optimism for lower-paid customers, during which those consumers will feel more able to spend.
"This is an opportunity that grocers should grab, as it is unlikely to last given likely price increases as costs are passed on. Those businesses that can move fast and decisively may yet be able to retain or grow their share of wallet over the festive period.
“The increased pressures on profits means it is unlikely that we will see a reduction in turnaround or transformation activity as we move into next year. In this vein, agility remains vital, with all businesses needing to be prepared to make tough decisions and to adapt and innovate at pace in the weeks and months ahead.”