Food price inflation has eased, according to latest sales figures from Kantar, which showed Christmas spending topped £12bn for the first time.
The survey, which covered the four weeks to 25 December 2022, showed that food price rises fell for a second month running with supermarket prices up 14.4% year-on-year in December, compared to 14.6% in November and 14.7% in October, in a signal that price increases are finally starting to slow.
Kantar's Fraser McKevitt said the figures suggested the "worst has now passed", although he added that this remained a "painfully high figure at the current rate, impacting how and what we buy at the shops".
Overall, sales hit a new record at £12.8bn, topping £12bn for the first time, with shoppers spending an extra £1.1bn this December compared to last year, driven higher by a boom in demand for cold and flu medicines.
Sales of cough sweets were up by 54% on last year, whilst tissue sales rose by 35%, as the UK was hit by bouts of Covid-19, strep-A and flu.
But while the value of goods sold rose, McKevitt said grocery price inflation was the real driving factor behind this rather than increased purchasing.
He pointed out sales volumes were actually down by 1% year-on-year, showing the challenges shoppers are facing.
McKevitt said this was shown across some popular Christmas categories. “For example, value sales of mince pies soared by 19% but volume purchases barely increased at all,” he noted.
Consumers continued to trade down to supermarkets’ own label products this period, with sales rising by 13.3%, well ahead of a 4.7% increase in branded lines.
McKevitt said: “Tesco’s Finest range remains the single largest premium own label line by some distance, while Aldi and Lidl were the biggest contributors to the premium own label sector’s overall growth in 2022.”
Buoyant Christmas sales were enjoyed across the board. The traditional grocers still captured most of the Christmas purchasing, with Tesco PLC (LSE:TSCO), J Sainsbury PLC (LSE:SBRY), Asda and Morrisons accounting for more than two thirds of all spending.
Asda led this group, with sales up by 6.4%, closely followed by Sainsbury’s and Tesco which achieved sales growth of 6.2% and 6.0% respectively. Despite sales falling by 2.9%, Morrisons had its best performance since June 2021, standing the retailer in good stead for a return to growth in the new year.
Aldi remained the fastest-growing grocer with 27.0% growth, taking its market share up from 7.7% this time last year to 9.1%. Lidl’s sales increased by 23.9%, moving its market share up by 0.9 percentage points to 7.2%.
Iceland’s sales grew by 10.2%, with sales of frozen poultry rising by 15% and frozen prepared foods by 18%. This pushed Iceland’s market share to 2.5%. Co-op’s market share now stands at 5.6%, while Waitrose has 4.7%. Ocado increased sales by 8.2%, maintaining a market share of 1.7%.