Grocery price inflation has slowed to 4.7 per cent this month as retailers ramp up promotions ahead of Christmas, show new figures released today (Nov 11) from Worldpanel by Numerator.
Take-home sales at the grocers grew by 3.2 per cent over the four weeks to 2 November versus last year, with spending on deals specifically climbing by 9.4 per cent. By comparison, spending on full priced goods rose by just 1.8 per cent.
Fraser McKevitt, head of retail and consumer insight at Worldpanel, comments, “Christmas ads are hitting our screens and the race to the big day is on in the supermarket sector. Retailers are very alive to the financial struggles that some households are facing, not least ahead of this year’s Budget.
"They’re eager to show how they’re offering shoppers value for money, putting the emphasis on price cuts rather than multibuy offers.
"It’s not just the Grinch who’s looking for savings with just shy of 30 per cent of consumer spending at the grocers on promoted items in October, a figure that we expect to go even higher as we get closer to Christmas.”
Despite tightening belts, Worldpanel is predicting a new sales record for retailer premium lines this year with the potential to hit more than £1 billion in December.
McKevitt explains, “It’s important to remember that shoppers often look for great value and quality, not just the cheapest product.
"At Christmas especially people want to treat themselves and throughout the cost of living crisis we’ve seen them turning to retailers’ premium own label lines to do that in a way that’s more affordable.
"Sales of these goods were worth £582 million in the latest month and they are likely to double as Christmas edges nearer, topping £1 billion in the month of December for the first time ever.”
Black Friday week could provide a significant sales boost for the grocers, particularly online. During this period last year, Amazon remained the destination retailer for general merchandise, while Tesco and Asda took second and third spot respectively in the battle for spend.
Across the market, there was an average sales uplift of 114 per cent with Worldpanel data showing that electronics, beauty and toys had the biggest spike in sales versus a typical trading week in 2024.
Online remains the fastest growing part of the grocery market and spending on home delivery rose by 11% this month, with every retailer who offers the service boosting sales.
McKevitt adds, “Online growth is primarily being driven by the already converted as existing shoppers continue to value the convenience of the format and make more orders.
"On average, households who use online grocery now buy three shops a month, making up a whopping 61% of their spending at the grocers.”
Tesco and Lidl both added half a percentage point of share to their market positions. Maintaining a run of double-digit growth from April, Lidl boosted sales by 10.8 per cent over the 12 weeks to take its share to 8.2 per cent.
Tesco now accounts for 28.2 per cent of the market as spending at Britain’s biggest grocer climbed by 5.9 per cent. Sales growth of 5.2 per cent took Sainsbury’s market share to 15.7 per cent.
With 10.6 per cent of the market, Aldi also won share and grew sales by 4.4 per cent. Spending at Iceland increased by 4.9 per cent, putting it ahead of the market rate. It has a share of 2.3 per cent, up 0.1 percentage points on 2024.
Spending at Morrisons nudged up by 2.3 per cent with a market share of 8.3 per cent. Waitrose’s sales rose by 3.8 per cent giving it a share of 4.4 per cent. Convenience retailer Co-op now holds 5.4 per cent of the market while Asda takes 11.6 per cent.
Looking across the wider high street, grocery sales at M&S over the 12 weeks increased at the fastest rate since June at 8.8 per cent higher than one year ago.