Christmas Grocery Numbers – what can we learn?
It always takes time for the real results of Christmas trading to become apparent, and this year there are lessons for all of us in the statistics and sales figures. Over £12billion was spent on groceries over the festive period, so what can we learn?
With less money to spend, many grocery consumers moved to Aldi and Lidl, with sales up 26% and 24.5% respectively.
Changing allegiances also saw consumers moving from brands to the Supermarkets’ own label products. Sales here increased by 13.3%, in comparison to the 4.7% increase in sales on branded lines. This movement was seen in Sainsbury’s, Tesco and M&S.
What does this tell us? As business owners, we need to have different levels of service to allow customers to step up or down according to their current needs or budget. In more ‘normal’ times there will always be a proportion of your customers who can, and will, pay for your premium product or service, as long as you make them aware of it. In the current market, having a lower price option can keep customers with you, rather than heading off to your (cheaper) industry colleagues.
The premium Supermarket ranges saw increased sales, thought to be a reflection of consumers choosing to eat at home rather than in restaurants. Tesco saw this with their ‘Finest’ range, and Sainsbury’s with it’s ‘Taste the Difference’ lines.
What does this tell us? Looking for similar opportunities for new markets could be a really good move for business owners outside of the grocery world. In the same way as the supermarkets are selling their ready meals and premium lines to customers preferring not to eat out, can you help people who are looking to reduce their spend in other ways?
Increased Food Expenditure, less gift spending
Tesco gift sales were ‘more modest’ while Sainsbury’s achieved its biggest ever Christmas on Champagne and sparkling wines. This was considered to be about people valuing the opportunity to spend quality time with loved ones, particularly after recent Covid-affected Christmases.
What does this tell us? As consumers are looking towards experiences and quality time, now could be a great time to promote your products or services that can create the ‘feel-good’ factor, or create memories.
Analysts Kantar reported store visits increased by 5% year on year in December. This is thought in part to be a reaction to reduced Covid concerns, but also a reaction to reliability of delivery issues caused by ongoing Royal Mail action.
Retail experts have suggested that this return to stores was also a desire to find the best offers.
What does this tell us? It’s been a fact for several years that retailers need to offer an experience to encourage visitors to their stores, but business owners can do the same. We know business is about relationships, so now is the time to focus on the experience your customers have when they visit your store or your premises. How can you set yourself apart and offer more?
Online sales ‘normalise’
Tesco CEO Ken Murphy believes online sales are now stabilising at around 13% of total sales post pandemic. This is some 59% higher than pre-pandemic levels. Ocado reported reductions in the size of it’s online orders, as well as the frequency.
What does this tell us? Online sales in all industries saw a huge increase during the pandemic, but it’s not going away. Multi-channel sales are the future, and building your business with an equal focus on Real Life and Online can present massive opportunities. You won’t always be able to take the same approach, but with careful thought you can link them, and feed one from the other.
The Grocery industry is obviously unique in many ways, but it’s an industry with which pretty much everyone interacts. This makes it a great indicator for how consumers generally are behaving. Learning from the big supermarkets and their results can be really illuminating. Do let us know your thoughts on the points and suggestions above, and if you’ve seen any of the same behaviours in your business in recent months; we’d love to know!
If you’d like to see more of the Christmas trading information, you can see the Retail Gazette article here.