Brits expected to spend ‘record’ £10bn this Christmas despite grocery sales slowdown

UK shoppers are could spend a “record” £10 billion in the run-up to Christmas, according to the latest figures from Kantar Worldpanel, despite supermarket sales growing at their slowest rate in nearly two years.

UK consumers could spend a record-breaking £10 billion in preparation for the festive period.

Overall, the UK’s grocery market is grew at a rate of 2.0% in the past three months – its slowest rate since March 2017 – as inflation has fallen to around 1.6%.

However, analysts at the market researcher believe Brits will spend a record-breaking £10 billion in preparation for the festive period.

“Because of the way Christmas falls, grocers have an extra trading day this year meaning overall sales in December – up to and including Christmas Eve – could reach £10 billion,” Fraser McKevitt, head of retail and consumer insight at Kantar, said.

“Despite an uncertain political climate taking its toll on consumer confidence, shoppers are still willing to spend that little bit extra on more expensive goods. Total premium own-label lines are growing at 5.5%, which could lead to record sales in this price tier of £1.1 billion over the 12-week period.”

Consumers are benefitting from lower inflation this season, McKevitt said.

“It now stands at 1.6% – less than half the rate of inflation in December 2017, when it reached 3.6% – leading to a slowdown in the overall market.

“Over the summer shoppers upped their weekly trips to the grocers as they took advantage of the hot weather, but with the mercury dropping the number of trips has tailed off – again contributing to waning market growth.

Digital transactions also rose by 3.7% compared with this time last year, meaning that online shopping now counts for just over 7% of the entire sector.

In terms of retailers, just three grew their market share since October. Co-Op’s sales grew 4.5% in the 12 week period, boosting its share of the grocery market up to 6.2%. Aldi and Lidl, meanwhile, remain the fastest-growing retailers in the sector, with sales rising 12.2% and 11.2% respectively. McKevit added that Co-Op also attracted 298,000 new customers in this time.

Tesco and Sainsbury’s, meanwhile, both lost market share and saw a drop in sales by 0.1% and 0.2% each.