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8th January 2008, Oxford
‘Despite record levels of promotions on offer in our supermarkets in the run up to the big day, there was no last minute Christmas rush in the grocery sector resulting in lacklustre sales performances over the Festive period.
Helped by Christmas Day being on a Tuesday - which meant an extra 2 shopping days in Christmas week - shoppers spent £5.7billion on food, drink and seasonal non-foods at Supermarkets and convenience stores in the 2 weeks up to 29th December reports market research company Nielsen. Over the 4 weeks in December, total spend on Christmas at food retailers was just over £11billion. Of the major multiples, Morrisons was the star performer with sales growths at over 9% YoY (Nielsen Homescan), ahead of Sainsbury, Asda and Tesco this Christmas.
Mike Watkins, Senior manager retailer services at Nielsen commented, “Christmas fortnight 2007 saw sales growths of 4.2% YoY within the grocery sector. These growths were in line with but did not exceed the underlying trends seen since mid 2007. Unlike last year where we saw a huge shopping surge in the final 2 weeks of December, there was no last minute rush this year.” He continued, “Furthermore, like for like sales at the Grocery Multiples grew by just over 3% over the 4 weeks to 29th December versus last year, growths that were almost half that seen in 2006.”
He summarised, “The last 2 weeks were a little disappointing but it’s the numbers that we were expecting. The impact of the deep promotions by the top 4 multiples was to keep like for like sales growth above inflation levels of 3% but they did not grow total food sales any further. The market slowed by 15th December and never really took off again. Had momentum continued, shoppers would have spent around £300m more on food, drink and general merchandise at the Grocery Multiples over December than they actually did.”
Key Christmas Performance Figures:
• A record 80% of all sales in the last 2 weeks of December 2007 went through Grocery Multiples, with the convenience sector taking the remaining 20%.
• Non food sales at the Grocery Multiples continued with strong and above benchmark growths of +8% (4 weeks to 29th Dec) and Hypermarkets became ‘destination shops’ for non food this year.
• Bakery (+8.9%) and Dairy (+7.4%) both showed strong sales growths but these are the categories which have seen significant cost price inflation pushing prices up.
• Beers, Wines, Spirits saw 3.9% growths in grocery multiples in December despite heavy promotion in the category – annual growth here is 6%. Sales growths stronger in terms of value than they were volume invalidating suggestions that heavy discounting by retailers is driving huge volume increases.
• Softdrinks sales growths were modest at +3.6% for December, so no seasonal upturn to off-set the poor summer performances here resulting in 2007 sales being flat against the previous year.
• Snacks and confectionery sales growths stood at 3% for December behind the annual average of 7%. Longer lasting and deeper promotions drove sales here and overall the category fared well for 2007 because of extra-ordinary summer sales. Biscuits and snacks drove growth here.
• Looking at seasonal favourites (4w/e 29th Dec 2007 versus same 4 weeks in 2006):
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Champagne sales went flat, £79million spent equalled no YoY growth in December while Sparkling Wine sales grew 10% YoY and accounted for £49million sales. A sign of consumers reigning in spend on luxury treats.
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Christmas stalwarts such as clementines (£25.5mil, +6%), sprouts (£13mil, +8%), poinsettias (£7mil, +8%) sold well as did certain organic lines but boxed chocolates (£204mil, -5%), cream liqueurs (£45.5mil, -5%) and mince pies (£34mil, +2%) didn’t fare so well.
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Following a culling of organic turkeys due to avian flu just before Christmas we saw organic whole turkey sales fall 20% YoY with sales of only £2.3 mil in December.
Unless otherwise stated, all data taken from Nielsen’s scantrack service which monitors sales in all major supermarkets and convenience stores using data collected at a nationwide network of EPOS checkout scanners. Scantrack represents sales in 74,000 stores nationwide.
About The Nielsen Company
The Nielsen Company is a global information and media company with leading market positions in marketing information (ACNielsen), media information (Nielsen Media Research), online intelligence (NetRatings and BuzzMetrics), mobile measurement, trade shows and business publications (Billboard, The Hollywood Reporter, Adweek). The privately held company is active in more than 100 countries, with headquarters in Haarlem, the Netherlands, and New York, USA. For more information, please visit, www.nielsen.com
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