In an unprecedented holiday season, British consumers reached a new milestone by spending a staggering £4.8 billion on groceries during the Christmas lead-up, marking the busiest festive season for supermarkets since the onset of the pandemic. This data, sourced from NIQ's Total Till report, highlights a significant shift in consumer behaviour.
Marks & Spencer emerged as a standout performer among significant supermarket chains. The retailer saw a 12.1% surge in sales in the last quarter of 2023, attracting nearly one-third of UK shoppers. This represents a 27% increase from the previous year, translating into an impressive influx of approximately 500,000 new customers for this venerable 140-year-old retailer.
Mike Watkins, the UK head of retailer and business insights at NIQ, commented on the trend: "With an average 18% increase in grocery spending compared to two years prior, consumers were cautious about overspending. This led to a reduction in volume purchased in eight of the last 12 weeks."
NIQ's findings, based on a panel of 14,550 UK households, also revealed a significant growth in the discount supermarket sector. Aldi and Lidl collectively accounted for one-fifth of total supermarket expenditure, demonstrating their rapidly expanding market presence.
Interestingly, this holiday season saw a shift in beverage preferences. While soft drink sales rose by 7%, traditional festive beverages like champagne and port experienced a decline in value sales by 5.8% and 4.3%, respectively.
Despite the surge in grocery sales, other retail sectors struggled over the Christmas period. Helen Dickinson, Chief Executive of the British Retail Consortium, reflected on the broader retail landscape: "The festive period didn't compensate for a year of sluggish retail sales growth. Weak consumer confidence continued to impact spending, particularly in areas like furniture and homeware, as households remained wary of larger purchases."
This contrast in consumer spending patterns offers a unique insight into the UK's current economic climate and consumer priorities.
We invite you to share your perspectives on these trends in consumer spending and the retail landscape. Please leave a comment below with your insights and observations.