£6.4 billion spending spree could be Christmas silver lining for supermarkets

Over £6.4 billion will be spent spent at the UK’s leading supermarkets in the two weeks to Christmas, according to global information and insights giant Nielsen.

Some 60% of UK shoppers plan to do their main Christmas grocery shop in the week before Christmas this year, the company research revealed.

This is good news for the multiples, where sales have been stagnant, if not in decline, for some time.

Promotional activity around Black Friday this year made little or no impact on grocery sales.

Sales for the four weeks to December 5, 2015 were down 1% by value and 0.8% by volume year on year.

It is the fourth time in the last five four-week periods that both metrics have been negative.

Mike Watkins, Nielsen’s UK head of retailer and business insight, said: “This could provide a welcome boost for grocery retailers, particularly with an extra weekday of trading before Christmas compared to last year.

"However, it’s the discounters which could make another leap in market share – a third of people are expecting to do their main Christmas shop at Aldi or Lidl.”

Asda continues to suffer most from the impact of the discounters.

It sales dropped 4.3% year on year, notching up the largest decline among the top ten supermarkets for the 10th consecutive twelve-week period.

Aside from Aldi, which grew 24.4% and Lidl, 19.8%, the largest sales growth came from Marks & Spencer at 4.6%. 

Hannah Maundrell, editor in chief at www.money.co.uk, said: “Customers developed full-price phobia and flocked to discount chains this year, forcing offline and online retailers into a price battle for Christmas custom and market leaders into rethinking their business plans.

“Time is now running out and shoppers that have been busy splashing the cash in pre-Christmas sales must finally turn their attention to their grocery shop.

“The race is on for supermarkets to make the most out of the next two weeks as consumers demand luxury goods for less.

“The winners will be the stores that couple convenience with quality and transparent pricing.

“This could be where stores that offer online orders claw back some ground from the discount brands that don’t do delivery.

“For many households, the stress of the instore pre-Christmas shop is something to be sidestepped completely.”

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