UK supermarkets became popular once again as sales their highest level since March 2020 over Christmas with Tesco emerging as the main beneficiary.
Despite soaring prices on the back of supply-chain constraints and labour shortages, Britons still spent £11.7bn in supermarket in December, with own-brand sparkling wine and crisps in high demand, according to market research firm Kantar.
Grocery sales totalled £31.7bn in the 12 weeks to December 26, down 3% on 2020 but 8% higher than pre-Covid 2019. Grocery inflation hit 3.5% last month, Kantar said, which added £15 onto the bill of the average shopper.
The Bank of England last month revised up its inflation forecast as it said consumer price inflation would peak at a 30-year high of around 6% in April.
Online shopping, which has boomed during the pandemic as more people worked from home amid lockdowns, fell by 3.7% year-on-year.
Kantar recorded the largest number of in-store visits to supermarkets since the very early stages of the pandemic prior to the first lockdown. The new peak came on 23 December.
“Shoppers clearly trusted that supermarkets shelves would remain well stocked and they didn’t feel the need to rush out much earlier to get their favourite festive treats,” said Fraser McKevitt, Kantar’s head of retail and consumer insight.
“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.”
Tesco remained the biggest supermarket in the UK with 27.9% market share, up 0.6 points and its highest level since 2018.
Ocado was the only major retailer not to see a fall in sales on last year, growing its take by 2.5%, while spending at Aldi was flat on 2020.
“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,” McKevitt said.
The prices of beef, crisps and skincare all shot up last month, Kantar said.
Among the remaining “Big Four” supermarket chains, Sainsbury’s, Asda and Morrisons saw sales fall by 4.4%, 3.9% and 6.5% respectively over the 12-week period compared with 2020.
“The data suggests that while there weren’t formal (Covid) rules in place across the UK this year, many people celebrated at home again due to Omicron,” said McKevitt.
He noted that premium own-label sales broke records this Christmas with shoppers spending £627m on supermarkets’ own upmarket lines over the four weeks to December 26, up 6.8% year on year.
