Inflation drives Britain’s record Christmas grocery sales

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LONDON — British grocery sales rose

9.4% to a record 12.8 billion pounds ($15.3 billion) in the

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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% 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%

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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% in December,

down from 14.6% 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%,

well ahead of a 4.7% increase in branded lines.

Kantar said visits to supermarkets increased 5.2%

year-on-year. Online grocery sales rose 4%, though its share of

the market fell 0.6 percentage points to 11.6%.

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Market leader Tesco, Sainsbury’s and Asda

all delivered solid performances with sales on a value basis up

6.0%, 6.2% and 6.4% 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 27.0% and 23.9%

respectively, partly reflecting new store openings.

Morrisons and Waitrose were the laggards with sales falls of

2.9% and 0.7% respectively.

On Tuesday, Aldi itself reported a 26% 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% 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.

UK grocers’ market share and sales growth (%)

Market share Market share % change in

12 wks to 12 wks to sales

Dec. 25 2022 Dec. 26 2021 (yr-on-yr)

Tesco 27.5 27.9 6.0

Sainsbury’s 15.5 15.7 6.2

Asda 14.0 14.2 6.4

Aldi 9.1 7.7 27.0

Morrisons 9.1 10.1 -2.9

Lidl 7.2 6.3 23.9

Co-operative 5.6 5.8 4.3

Waitrose 4.7 5.1 -0.7

Iceland 2.5 2.4 10.2

Ocado 1.7 1.7 8.2

Source: Kantar

($1 = 0.8345 pounds)

(Reporting by James Davey

Editing by Mark Heinrich)