Till value growths have increased to 5.3 per cent from 4.7 per cent last month despite inflation, stated a recent industry report, adding that consumers are expected to spend £34 billion on groceries this year to enjoy the festive period and for many, Christmas will be cushioned by spending more on food and drink at home.
According to NielsenIQ data, average spend per visit increased to £18.50 compared to £18.20 last month but is still lower than the same period last year when it was £18.70. In terms of channel performance, discounters Aldi and Lidl (7.7 per cent) are outperforming convenience stores (4.3 per cent) and supermarkets (3.1 per cent).
Reflecting on the wider slowdown in discretionary spending due to inflation, general merchandise value sales fell -1.2 per cent with volumes down -7.6 per cent. Nevertheless, value growth across FMCG for the week ending Nov 5 was much more robust at 5.1 per cent at the grocery multiples, strongest it has been since July’s record-breaking temperatures.
The weather remains unseasonably warm and impulse categories continue to have good momentum with crisps and snacks (volumes +2.9 per cent) and soft drinks (volumes +0.6 per cent) the only categories to see volume growth in the last four weeks, and with value growths of +13.3 per cent and +9.6 per cent respectively.
NielsenIQ expects to see growth at larger stores improve in the run up to Christmas as savvy shoppers hunt for the lowest prices. 49 per cent expect to find special Christmas offers from supermarkets (a direct discount on price being the most preferred) which suggests that they can be persuaded to spend provided the price is within budget. Consumers are expected to make a trade off this year to enjoy the festive period and for many, Christmas will be cushioned by spending more on food and drink at home.
Mike Watkins, NielsenIQ’s UK head of retailer and business Insight, said, “There is some better news for retailers and suppliers as shoppers claim they will start to buy some items early for Christmas. Our recent consumer survey shows that 30 per cent of shoppers will have started their Christmas shopping this year before mid-October compared to 18 per cent last year. 27 per cent also say they will buy Christmas gifts when they see them in store which suggests a ‘spreading the cost of Christmas’ mindset is ever more important this year as budgets are stretched.”
“NielsenIQ is anticipating £34 billion will be spent at the Grocery Multiples in the 12 weeks to 31.12.22 which is a growth of c4 per cent compared to last year when there was weak post pandemic comparatives and no real industry growth. The difference this year is that, due to inflation, we expect volumes to be down c4 per cent with shoppers buying less and more carefully this Christmas.
“With the cost of grocery shopping still rising, this is motivating shoppers to shop and buy differently. With all of the big four supermarkets either giving extra price reductions or adding weekly vouchers to their loyalty schemes, this may prove the catalyst to help grow sales this Christmas,” reports quoted Watkins as saying.
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