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Total till sales grew +7.6% in the four weeks ending 3rd December 2022, this was up from +5.3% recorded the previous month, reveals new data released by NielsenIQ.

This acceleration in total till sales is largely a result of double-digit food inflation, as UK shoppers remain cautious regarding the contents of their shopping baskets.

According to NielsenIQ data, in those four weeks, shoppers focused on core grocery essentials as they were mindful of discretionary Christmas spend.

Mike Watkins, NielsenIQ’s UK Head of Retailer and Business Insight, tells Grocery Trader what trends are driving shopper spend.

What do the latest Nielsen figures reveal about shopper spend in supermarkets?

From the start of Q4 through to the Christmas period, we have seen shoppers really start to dial down what they spend. Reducing the volume of unnecessary items in their shopping baskets and trading down to cheaper products, buying more private label goods, managing budgets by buying fresh food ‘little and often’ are all changes in shopper behaviour being triggered by rising prices.

What trends are driving shopper spend?

Clearly the key trend is the need to save money on all retail spend – on non-food, hospitality as well as cutting down on the more luxurious meals. This reflects increased energy costs this winter and also for many households, increased mortgage costs, which kick in in particular at the start of 2023. This hierarchy of needs has temporarily blunted the wider interest in shopping as sustainably as possible, but we can expect this to gain more momentum again in 2023.

The movement towards sustainable shopping has not gone away. It is perhaps less top of mind at the moment for some shoppers who are faced with rising cost of household bills.

Are shoppers worried about food inflation and the cost-of-living crisis and therefore spending less in-store?

Yes, it’s a macro trend impacting all channels as we also see shoppers spending less money online.

Which grocery categories are doing well and which are struggling?

We have seen a lift in value growth for categories such as dairy (+13.9%), pet food (+12.5%), frozen food (+11.9%), soft drinks (+10%) and packaged grocery (+9.2%) and an increase in value sales for crisps and snacks (+12.7%) likely due to the World Cup celebrations. However, we have seen beer, wines and spirits, which are a key category to drive value sales at this time of the year decline in value by -1.5% and volume by -3.6%.

Is there a move away from luxury items and towards value products?

Yes, to some extent. However, in terms of food, shoppers are shifting towards buying more essential groceries and affordable treats like confectioneries but also investing some of these savings into food and drink indulgences for Christmas, typically trading to premium private label.

How did the World Cup affect sales of categories like beer, wine and spirits and snacks?

The World Cup’s knock-out stages boosted England’s on-premise sector, with drinks sales up by 46% year-on-year on the day of the last-16 match with Senegal (Sunday 4 December), and by 21% during the quarter-final against France six days later. Beer and cider categories were the best performers in the on-premise, with year-on-year sales up 26% and 30% respectively.

Was there any cannibalisation between the World Cup and Christmas? In any other World Cup year, there would be a sales spike over the summer during the tournament and then a separate one for Christmas. But with the World Cup being in winter, were the two spikes merged into one and therefore there were less sales over the whole year?

There was no discernible ‘spike’ in supermarket spend in this category in November/ December as the buying patterns for World Cup merged into also stocking up for Christmas.

Beer, wines and spirits saw both value -1.5% and volume -3.6% declines in the four weeks ending 3rd December 2022, according to NielsenIQ data.

Why was this?

Partly due to 2021 comparatives still being high and Omnicron changing how we shopped this time last year. There was less eating and drinking out or away from home and more beer, wine and spririts consumed at home. There was also a wider fall in category volumes due to accelerating inflation.

What were the factors for consumers when choosing the supermarket for their Christmas 2022 grocery shopping?

Shoppers definitely went for value for money, good ranges and convenience. These attributes are always important and Christmas 2022 was no different.

How are online grocery sales performing?

Our recent Total Till report revealed that online sales fell 1.3% and the online share of FMCG spend remained at 11.3%, down from 12.3% this time last year. However, there was strong growth in brick and mortar, with sales up 9.3% and visits to stores up +7.4%.

It’s obvious that shoppers are hunting for the best value and are much less reliant on online shopping than in the previous two years as 77% of shoppers say they will do their Christmas grocery shopping in an actual store.

Out of the multiple grocers, including the discounters and the Co-op, which ones are performing the strongest and which are less strong, according to the latest figures?

According to the 12-weekly share of grocery market spend by retailer and value sales change, we see that discounters like Lidl and Aldi look set to have their best ever Christmas with a new market share high, while Waitrose and Morrisons are behind last year’s performance.

 

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