Nielsen retail performance data shows takings at the tills for the four-week period ending December 31, 2016, was up 3.3% over all F&B categories, compared to the same period a year ago.
Beers, wines and spirits were up 5.7%, beaten only by confectionery which saw 9.5% growth. Meanwhile, soft drinks were up 4.3%.
Another category with strong growth was deli/cheese/meats, which was up 5.6%. However, in fresh meat, fish and poultry, deflation continued to impact sales.
The overall growth of 3.3% was the highest growth since 2012 (which saw 3.7% growth) and a considerable improvement on Christmas 2015 when year-on-year growth was flat.
‘Surprisingly strong’ sales
Nielsen says that Christmas grocery shops happened particularly late in 2016, meaning that the four weeks up to Christmas were ‘surprisingly strong’.
“Shoppers delayed grocery purchasing to such a degree that it caused a huge surge in sales in the week ending Christmas Eve, with sales rising 22% compared to the same week the year before,” said Mike Watkins, head of UK retailer and business insights, Nielsen. “Spend in that final two weeks alone was £5.9bn ($7.17bn)”.
“The remarkable buoyancy in shoppers spending freely in the final two weeks of the year to enjoy the festivities was good news for retailers considering the consumer head winds expected in 2017 with the return of cost price inflation – after three years of deflation – plus the ongoing uncertainty about the impact of Brexit on UK grocery sales.”
Less complicated promotional offers, along with better communicated price cuts, helped capture spending over the Christmas period. However, the percentage of purchases that were sold on promotion dropped to 27% this Christmas, compared to 31% in 2015.
And, despite the popularity of online shopping, supermarkets benefitted from more in-store visits than last Christmas, with consumers wanting to shop around for the best prices and more choice.
Growth of discount supermarkets
Supermarket chain Aldi had the biggest year-on-year Christmas growth for the 12 weeks leading up to Christmas (up 10.4%), attracting an extra million new shoppers compared to the year before, according to Nielsen.
The supermarket reported that it had sold more than 2m bottles of Prosecco.
In particular, sales of its premium Specially Selected range surpassed expectations, it added.
The other fastest growing retailers for the Christmas period were Lidl (up 5.8%) and Iceland (up 4.7%).