Inflation drives Britain’s record Christmas grocery sales

A person walks past sale signage on Oxford Street during the second day of Boxing Day sales, in London, Britain, December 27, 2022. REUTERS/Henry Nicholls/File photo

LONDON  – British grocery sales rose 9.4 percent to a record 12.8 billion pounds ($15.3 billion) in the four weeks to Dec. 25, though growth was driven by price inflation rather than increased purchasing, market researcher Kantar said on Wednesday.

It said sales measured by volume, or the amount people bought, fell 1 percent year-on-year, showing the challenges shoppers are facing during a cost-of-living crisis.

“This story played out across the traditional Christmas categories. For example, value sales of mince pies soared by 19 percent but volume purchases barely increased at all,” said Fraser McKevitt, Kantar’s head of retail and consumer insight.

Kantar said grocery price inflation was 14.4 percent in December, down from 14.6 percen in November, with prices rising fastest in markets such as milk, dog food and frozen potato products.

“This is the second month in a row that grocery price inflation has fallen, raising hopes that the worst has now passed,” McKevitt said.

He noted that consumers continued to trade down to supermarkets’ own label products, with sales rising by 13.3 percent, well ahead of a 4.7- percent increase in branded lines.

Kantar said visits to supermarkets increased 5.2 percent year-on-year. Online grocery sales rose 4 percent, though its share of the market fell 0.6 percentage points to 11.6 percent.

Market leader Tesco, Sainsbury’s and Asda all delivered solid performances with sales on a value basis up 6 percent, 6.2 percent and 6.4 percent respectively over the 12 weeks to Dec. 25.

But German-owned discounters Aldi UK and Lidl GB remained the fastest growing chains with growth of 27 percent and 23.9 percent respectively, partly reflecting new store openings.

Morrisons and Waitrose were the laggards with sales falls of 2.9 percent and 0.7 percent respectively.

On Tuesday, Aldi itself reported a 26- percent increase in December sales.

Tesco and Sainsbury’s are due to update on Christmas trading next week.

Overall UK inflation is running at 10.7 percent and consumers face the prospect of a tighter squeeze in 2023, with higher taxes and mortgage rates and scaled-back government support on household energy bills.