UK shoppers are expected to spend more this Christmas due to lower inflation and strong promotions, as growth steadied in November, according to the latest data from NIQ.
Total till sales growth steadied at UK supermarkets, with a 3.7% rise in the four weeks ending 30 November – down from 4% the previous month.
The slowdown in growth is likely due to milder weather, Black Friday sales, and shoppers holding out until early December for Christmas shopping.
NIQ data also revealed that – with shoppers actively looking for discounts over the last four weeks – there was a boost to store visits of 5.7% ahead of online shopping visits, which saw an increase of 0.6%.
As a result of this, the online share of FMCG was at 13.1% – below last year’s 13.4%.
The percentage of sales purchased on promotion increased to 25% – up by 1% on October’s figure.
Holiday Spend
Shoppers are seeking deals as a way to save money, and retailers and brands are hoping to drive incremental sales through more in-store promotional activity and increased loyalty app discounts.
The data also suggests that ‘personalised savings’ have unlocked this discretionary spend, with some 38% of households set to use vouchers and points saved up for their Christmas groceries this year.
Black Friday also coincided with payday, at the end of the month, seeing value growth sustained at the grocery multiples in the last week of November.
Shoppers cashed in on higher-priced items while on promotion, such as 25% off six bottles of wine, as well as beauty and gifting offers.
However, this likely resulted in holding back spend on other items, such as storage cupboard food and frozen and household basics, where growth was flat.
Growth
In terms of category growth, NIQ data shows that health and beauty experienced an uplift of 6.9% in sales, likely helped by Black Friday discounts.
Conversely, wine, beer and spirits continued to struggle, as value sales fell by 3.8% and there was no corresponding increase in unit sales, compared to a year ago.
NIQ also revealed that some 50% of shoppers still expect to eat turkey at Christmas, while 22% will opt for chicken, followed by beef, at 20%.
Additionally, some 12% will opt for vegetarian or vegan alternatives.
Over the past 12 weeks, Ocado has remained the fastest-growing retailer in the UK, with 16.2% growth.
Lidl came next, with 11.6% growth, closely followed by Marks & Spencer, at 10.6%, while Tesco maintained healthy sales growth of 5.1%.
‘Late Rush’
Speaking about the data, NIQ’s head of retailer and business insight, Mike Watkins, said, “Sales are going to accelerate in the two weeks up to 21 December.
“The biggest single week will be the week ending 21 December, with £6 billion being spent at the grocery multiples, which is a third of the four-weekly spend in one week.
“Food retailers can prepare for this late rush starting next week, as shoppers will be looking for fresh food, centrepieces for the dinner table, and last-minute gifts, including a trade-up to premium items.
“Last year, with food inflation at 7% [BRC NIQ SPI], volumes fell in December 2023.
“However, this year, NIQ expects volume growth of around 1%.
“Even with 50% of households saying it is important for them to make savings on their Christmas groceries this year, some 66% still expect they will spend the same or more than last year [NIQ Homescan survey] and 38% intend to use points or vouchers saved up.
“So, there are reasons to be cheerful.”
Read More: UK Grocery Inflation Rises to 2.6% – Kantar
