Retailer performance in 2021
UK Christmas grocery sales hit £11.7 billion over the month of December, which was 0.2% lower than the record-breaking sales in 2020.
Following UK grocery sales in 2020, most retailers struggled to achieve year-on-year sales growth over the Christmas period in 2021. According to Kantar data, the only retailers to achieve year-on-year grocery sales value growth in the four weeks up to Christmas were M&S, Lidl, Aldi and Ocado. This is due to a variety of factors such as the opening of the out of home market. This contributed to there being limited year-on-year value growth across most regions in the UK on the four weeks up to Christmas.
Whilst small amounts of growth were experienced in the north and south of England, Wales saw the biggest step back when compared to the rest of the UK, experiencing a -6.8% decline in value growth.
Wales saw the biggest step back when compared to the rest of the UK, experiencing a -6.8% decline in value growth.
M&S came out on top
M&S was named the fastest growing major store-based food retailer over the Christmas period. M&S has worked to broaden the appeal of its food range with more family-orientated products and shift towards lower prices. This assisted the retailer in gaining market share as people shifted to shopping in M&S rather than bigger grocery shops. M&S grocery sales value growth increased by 7.6% in the four weeks up to Christmas.
The discounters had a successful Christmas
Supermarket discounters Aldi and Lidl GB proved successful this Christmas achieving increased market shares by 0.3% and 0.2% over the 12 weeks to 26th December. Experts have stated that the return of Aldi’s Christmas television advert played a large part in its success as it helped to attract over half a million new customers from the big four supermarkets.
Tesco achieves highest market share since 2018
Tesco’s focus on value for money and competitive pricing through its Aldi Price match strategy and its Clubcard discounts proved beneficial for the retailer over Christmas. The retailer achieved its highest market share since 2018, although Tesco struggled to achieve year-on-year grocery sales value growth.
Sainsbury’s struggled to match last year’s performance
Sainsbury’s struggled to achieve year-on-year growth in sales over the festive period; however, sales growth was strong when compared with pre-pandemic figures in 2019. The Sainsbury’s quality with Aldi prices campaign proved popular with key Christmas items, such as turkey crowns, which were £6.89 a kilo. The campaign led to Sainsbury’s selling over 20% more volume on key items compared to the previous year.
Asda, Morrisons, Waitrose and Co-op have yet to post results of their Christmas trading performance however according to Kantar each of these retailers struggled to achieve year-on-year grocery sales value growth in the four weeks up to Christmas.
Key trends across the whole grocery retail sector
After last year’s muted Christmas celebrations, UK shoppers seized the opportunity to hold big celebrations for friends and family, creating some new and interesting consumer spending grocery trends across the sector.
Kantar data revealed rising prices pushed up shopping budgets with grocery price inflation reaching 3.5% in December, adding nearly £15 to shoppers’ average monthly grocery bill. Despite rising prices, consumer spending on traditional Christmas dinner items stayed similar to 2020; however, spending on more indulgent items increased with sales of sweet treat items such as Christmas chocolates increasing by 21% compared to last year.
Premium had a strong place in the market
Premium own label brands such as Tesco Finest and Sainsbury’s Taste the Difference, saw recording breaking sales with shoppers spending £627 million in the four week lead up to Christmas.
Purchasing of traditional Christmas vegetables in decline
The ability to mix with different households contributed to fewer shoppers purchasing all vegetable types this Christmas. Potatoes saw the biggest decline in volume growth by -10.2%, then parsnips by -8.4%, carrots by 6.4% and sprouts by -4.8%.
In 2021 the NFU’s Food Chain team had over 60 meetings with businesses in the retail and foodservice sectors. Over the next year the NFU will continue to work closely and have regular conversations with retailers to understand their plans and represent the views of our members.