Festive demand boosts supermarket sales

According to NielsenIQ, total till value growth increased to 10.9% from 7.6% in November, boosted largely by high food inflation and weak comparatives but also especially strong trading in the seven days leading up to Christmas Eve.

Values sales increased by 19% at grocery multiples in the week before Christmas, NielsenIQ found, with spending topping £4.6bn, making it the highest spending week on record. Volumes sales increased by 8.8%.

NielsenIQ noted: "The UK’s first unrestricted Christmas in three years led shoppers to fully enjoy the festivities with family and friends. Supermarkets experienced last-minute in-store shoppers, with discounters coming out as clear channel winners."

In the 12 weeks to 31 December, Aldi saw sales surge 19.3% year-on-year, while Lidl reported growth of 15.7%. NielsenIQ said over 18m householders had visited the discounters, which have benefited from hard-pressed shoppers seeking out bargains as well as aggressive expansion plans.

Tesco, the UK’s largest supermarket by market share, reported an 8% year-on-year jump in sales during the quarter, while J Sainsbury saw sales grow by 8.5%, Asda by 7.9% and Marks & Spencer by 9.0%. Wm Morrison reported a 1.1% decline.

Looking ahead to the current year, Mike Watkins, UK head of retailer and business insight at NielsenIQ, said: "Weak confidence around personal finances and a squeeze on disposable income will have a big impact on demand over the full year. We estimate today food retail growth in 2023 to be around 5% - a total of £190bn across all channels.

"However, we also expect the recession to start to influence shopper behaviour and reframe overall retail spend."