Consumers have flocked to supermarkets for their Christmas food purchases, registering the most store visits since the stocking frenzy at the start of the pandemic.
Grocery sales hit £ 11.7 billion last month and £ 31.7 billion in the 12 weeks leading up to Boxing Day, according to Kantar, the market research group. Sales are 3% lower than 2020 levels when tighter coronavirus restrictions were in place, so people bought more food to eat at home, but 8% more than in 2019.
Despite the increase in Covid-19 cases, due to the spread of the Omicron variant and isolation requirements, online grocery sales fell 3.7% in December from the previous year . As a result, online sales accounted for 12.2% of total food sales, down from 14% at the height of the pandemic.
As the holiday season approaches, there were concerns that supply chain challenges and labor shortages could lead to shortages on shelves and shortages of key items, such as turkeys. However, customers seemed convinced that their local superstores would have the products they wanted.
Fraser McKevitt, Chief Analytics Officer at Kantar, said: “The real driver of the bumper sales for December 23 was not online as we had the most store visits since March 2020 [in] this month. Shoppers had a clear belief that supermarket shelves would remain well stocked, and they didn’t feel the need to rush out much sooner to purchase their favorite festive treats.
Clive Black, Analyst at Shore Capital, said: “Christmas 2021 has been done quite well for UK shoppers on our in-store visits; there were a lot of cabbages and turkeys – too many in some cases… The availability of key products was good, although across the store there were distinctly stronger differences with Marks & Spencer and Tesco than the market in its whole on these measures.
Buyers were keen to indulge themselves after the Covid disruptions of the previous year, leading to record premium line sales. Sales of expensive supermarket lines, which include the Tesco Finest and Iceland Luxury lines, rose 6.8% to £ 627million from a year earlier.
Grocery prices also rose 3.5% last month, adding almost £ 15 more to average monthly grocery bills, as inflation began to weigh in after supermarkets passed on costs higher labor costs.
Ocado, which sells Marks & Spencer groceries online, was the only grocer to increase sales in the 12-week period leading up to Christmas, increasing sales 2.5% after adding more slots from delivery than the previous year.
Tesco outperformed its big rivals, increasing its market share from 0.6% to 27.9%, its highest level since January 2018, although sales fell 2.9% from the previous year, according to Kantar. Asda’s sales fell 3.9%, Sainsbury’s fell 4.4% while Morrisons, which was recently shut down by Clayton, Dubilier & Rice, fell 6.6%. Tesco and Sainsbury’s both report next week on their festive trade figures.
Aldi’s sales were flat while Lidl’s were down 0.3%. Waitrose’s sales fell 1.4 percent and Iceland’s sales fell 6.1 percent. Giles Hurley, Managing Director of Aldi, said: “Our performance as a market leader has shown that customers are on top of the seasons, ensuring they are enjoying the family Christmas they deserve after a difficult year. by stocking up early and spending on luxury at low cost. “
One of Sir Terry Leahy’s former lieutenants at Tesco has been hired by Asda to run its stores.
Ken Towle spent three decades rising through the ranks at Tesco and left in April 2015 for a consultant position before taking on a Managing Director position at Nisa, the convenience chain now owned by the cooperative. Towle will join Asda later this year as Director of Retail Sales.
Leahy is now chairman of Morrisons after spearheading the supermarket buyout by Clayton, Dubilier & Rice, whose chief executive is David Potts, another former Tesco executive.
Towle, 57, said: “It’s an exciting time to join the Asda team and I can’t wait to get started.”
Asda is still without a CEO, four months after Roger Burnley left earlier than expected after disagreeing on strategy with new owners, the Issa brothers.
Asda was bought in 2019 by oil tycoons Mohsin and Zuber Issa and TDR Capital in a £ 6.8 billion deal. The third largest supermarket in the UK, founded in 1949, has 145,000 employees and around 630 stores.
Derek Lawlor, who has led Asda’s sales team for the past two years, is also leaving the grocer, marking another high-profile loss following the departure of COO Anthony Hemmerdinger and Preyash Thakrar, director of strategy, in September.
Asda announced that it had poached Kris Comerford, who was most recently Tesco’s UK commercial director for packaged food, fuel and tobacco, and that it was displacing Simon Gregg, who currently heads the online operations of the grocer, to his management team. He also promotes Liz Evans, who recently joined Asda after leading the fashion brand FatFace to its board of directors.