Shoppers have been prioritising grocery savings to spend more over the Christmas period as supermarket sales growth is less than expected.
According to the latest data from NIQ, total till sales at UK supermarkets rose 8.7% in the four weeks to 4 November against a backdrop of slowing inflation and an increase in promotional activity – 24% of sales, up from 21% last year.
Sales on a volume basis, or the number of items sold, fell 0.2%, continuing an improving trend after a 0.4% drop in NIQ‘s October report.
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The average spend per visit also increased to £20.20, up from £18.60 this time last year, but NIQ said shoppers remain cautious when spending on food and drinks to preserve spending power ahead of Christmas.
This has impacted sales for general merchandise, such as Halloween items, toys, clothing and homewares, with weak sales (down 4.9%) at major supermarkets.
In terms of retailer performance, Aldi (+17.7%) and Lidl (+19.1%) continued to grow market share, and Sainsbury’s (10%), Tesco (+9.6%) and M&S (+14.4%) also had strong sales growth. Ocado (+11.5%) also grew its market ahead of Christmas.
NIQ UK head of retailer and business insight Mike Watkins said: “This Autumn, shoppers have been carefully managing their grocery budget and making trade offs with other spending which means the supermarkets will need to get shoppers into the mood to spend as we get closer to December.
“Christmas campaigns will be more important than usual as shoppers are looking for smart savings and good reasons to spend. Many shoppers will be holding out for a few more weeks with the hope of not missing out.
He added: “All eyes will now be on the top two retailers, Tesco and Sainsbury’s to pull off a strong performance in the weeks ahead.
“M&S will also be optimistic of significant growth and we also expect the discounters Aldi and Lidl to gain market share this Christmas. All five retailers are also expected to drive strong growth in premium food and drink when shoppers finally embrace the festive spirit.”
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