Lacklustre Christmas for grocery retail, Nielsen figures show


The absence of a last-minute shopping rush led to lacklustre sales performances over the festive period, according to market research company Nielsen.


Still Turkey on Table

This was despite record levels of promotions on offer in supermarkets in the run up to Christmas, it added.

Shoppers spent £5.7bn on food, drink and seasonal non-foods at supermarkets and convenience stores in the two weeks to 29 December 2007, the figures show.

Over the four weeks in December, total spend on Christmas at food retailers was just more than £11bn.

Of the major multiples, Morrisons was the star performer with year-on-year sales growth at more than 9%, ahead of Sainsbury’s, Asda and Tesco.

Mike Watkins, senior manager retailer services at Nielsen, said: “Christmas fortnight 2007 saw sales growths of 4.2% year-on-year within the grocery sector.

“These growths were in line with – but did not exceed – the underlying trends seen since mid 2007.

“Unlike last year where we saw a huge shopping surge in the final two weeks of December, there was no last-minute rush this year.”

He added that like-for-like sales at the grocery multiples grew by just more than 3% over the four weeks to 29 December when measured against the same period in 2006.

Watkins added: “The impact of the deep promotions by the top four multiples was to keep like-for-like sales growth above inflation levels of 3% but they did not grow total food sales any further.

“The market slowed by 15 December and never really took off again. Had momentum continued, shoppers would have spent around £300m more on food, drink and general merchandise at the grocery multiples over December than they actually did.”

Key Christmas performance figures:

• A record 80% of all sales in the last two weeks of December 2007 went through grocery multiples, with the convenience sector taking the remaining 20%.

Non-food sales at the grocery multiples continued, with strong and above-benchmark growths of 8% in the four weeks to 29 December.

Hypermarkets became “destination shops” for non-food.

Bakery (+8.9%) and dairy (+7.4%) both showed strong sales growths but these are the categories which have seen significant cost price inflation pushing prices up.

Beers, wines and spirits saw 3.9% growths in grocery multiples in December despite heavy promotion in the category – annual growth here is 6%. Sales growths were stronger in terms of value than they were in terms of volume, meaning the growth is not being driven by heavy discounting.

Soft drinks sales growths were modest at +3.6% for December

Snacks and confectionery sales growths stood at 3% for December, behind the annual average of 7%. Longer-lasting and deeper promotions drove sales.

Seasonal favourites

Champagne sales were flat at £79m

Sparkling wine sales grew by 10% year on year to £49m.

• Christmas stalwarts such as clementines (£25.5m, +6%), Brussels sprouts (£13m, +8%) and poinsettias (£7m, +8%) sold well

Boxed chocolates (£204m, -5%), cream liqueurs (£45.5m, -5%) and mince pies (£34m, +2%) did not fare so well.

• Following the cull of organic turkeys due to avian flu just before Christmas, organic whole turkey sales fell by 20% year-on-year with sales of only £2.3m in December.

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