Supermarket price inflation fell last month for the first time in 21 months, according to new data, though as it still stands at 14.6% it is expected to lead to a record month for the likes of Tesco PLC (LSE:TSCO) and J Sainsbury PLC (LSE:SBRY).
This followed a 0.1-percentage-point drop in grocery price inflation in November, market data from Kantar showed.
At current prices, it was calculated that supermarket shoppers will need to spend an extra £60 in December to buy the same items as last year, with a traditional Christmas dinner for four costing £31.
For supermarket chains such as Tesco and Sainsbury, Wm Morrison Supermarkets and Asda these levels of inflation are likely to make it the most lucrative December ever for take-home grocery sales.
Recent reports have suggested that big grocery chain are profiting at the expense of farmers and other food producers, which as well as the cost of living squeeze may have influenced Sainsbury's to this week promise to 'invest' £50mln more in cutting prices.
Fraser McKevitt, Kantar's head of retail and consumer insight, said: “December looks set to be a record-breaking month with sales going above the £12bn mark for the first time."
Last year, grocery sales in December hit £11.7bn, which was down 0.2% on a record December 2020.
In recent weeks, the football World Cup has had little effect on sales, according to McKevitt, with take-home beer sales nudging up 5% year-on-year in the last four weeks, which was mostly due to increased prices.
“Many people are taking the chance to enjoy a social pint while watching the games in bars and pubs, whereas last year we were in the middle of a COVID-19 resurgence so consumers were limiting their movements and going out less. We’re likely to be marking the impact of that comparison with higher at-home volumes one year ago,” he said, with crisps and snacks faring better in terms of sales.
As for the individual supermarkets, the strong growth of the discounters continued, not surprisingly in the face of the cost of living crisis.
In the past twelve weeks, Lidl’s year-on-year sales increased by 22.0%, pushing its market share to a record 7.4%.
An additional 1.5mln households shopped with Aldi compared with 2021 as it grew sales by 24.4% to claim 9.3% of the market.
Asda’s sales grew ahead of the sector, up by 6.1%, keeping its share steady at 14.0%.
Tesco saw its market share hit 27.2% as its sales rose by 3.9%, while number-two Sainsbury's pushed up sales by 4.3% this period.
Convenience retailer Co-op increased sales by 3.5% and achieved 6.0% market share.
Waitrose’s market share was at 4.5% while Iceland’s sales grew by 6.1%, as its share remained at 2.3%.
Ocado Retail, the joint venture between Ocado Group PLC (LSE:OCDO) and Marks and Spencer Group PLC (LSE:MKS), saw its market share fall slightly to 1.7%, with sales declines concentrated in its traditional South East and London heartland. However, the online specialist continued to expand its reach in northern England, Kantar said.