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Festive grocery sales in 2021 down on previous year but price inflation at four-year high

Published: 10:51 05 Jan 2022 GMT

Ocado Group PLC -

Christmas grocery sales slipped from the record levels seen in 2020 but were stronger than pre-pandemic figures as in-store visits hit their highest level since March 2020, according to the latest supermarket till data collected by Kantar.

Food price inflation, however, was at its highest for four years, excluding a brief period in spring 2020 when promotions were cut amid product shortages.

Prices rose fastest in markets such as fresh beef, savoury snacks and skincare while falling in fresh bacon, bath and shower products and spirits.

Overall, grocery sales reached £31.7bn over the 12 weeks to 26 December 2021, down by 3% compared with 2020 but up 8% on 2019.

Fraser McKevitt, head of retail and consumer insight at Kantar, said: “People seized the chance to enjoy Christmas with friends and family after last year’s muted festivities, and grocery sales hit £11.7bn over the month of December alone.

“This lofty spend figure is down just 0.2% on record 2020 sales when several areas faced restrictions and the data suggests that while there weren’t formal rules in place across the UK this year, many people celebrated at home again due to Omicron.

“We can really see just how much spending accelerated in December compared with earlier in the year by looking at the average trend during March to November when sales were down by 2.5% against 2020.”

Premium own-label sales broke records this Christmas and shoppers spent £627mln on supermarkets’ own upmarket lines over the four weeks to 26 December, an increase of 6.8% versus 2020.

On price rise, McKevitt said: “Grocery price inflation reached 3.5% in December, adding nearly £15 to shoppers’ average monthly grocery bill. We saw prices rise faster for a short while in Spring 2020 when promotions were cut to maintain product availability, but before that you would have to go back nearly four years to January 2018 to see inflation running higher.”

Despite rising COVID-19 case numbers, online sales fell in December by 3.7% against 2020 and accounted for 12.2% of sales. Figures from a month ago showed online sales fell 12.5% in November.

Individual retailers found it challenging to secure year-on-year growth over the Christmas period following last year’s highs, but every major grocer increased sales compared with the final 12 weeks of 2019.

As for individual supermarkets, Ocado Retail, the joint venture between Ocado Group PLC (LSE:OCDO) and Marks and Spencer Group PLC (LSE:MKS), saw a 2% increase in the 12 weeks (after 2.4% and 2.1% falls in the November and October numbers), Aldi was flat, Tesco PLC dipped 0.9% (after a fall of 1.4% and a rise of 0.2% in the previous two reports) but grew its market share to a hefty 27.9%, Asda fell 3.9%, J Sainsbury PLC dropped 4.4% (5.3% and 2.8% previously) and Morrisons lost 6.5%.

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