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WHERE were you on 23 December? With Christmas firmly back on the calendar after weeks of uncertainty, odds are you were one of the tens of thousands of shoppers dashing around the supermarket stocking up on festive treats.
Sales of mince pies hit £62 million this Christmas, up 7% on 2020, while £61 million was spent on chocolates, marking a jump of 21% on the year before; with the busiest festive shopping day 23 December, according to the latest data from market research group Kantar.
Interestingly, according to Kantar, Christmas shoppers ventured in-store more this Christmas, rather than shopping online; probably as a result of the last minute rush. This means that while online sales in December fell by 3.7% year-on-year and accounted for 12.2% of sales, it was in-store that the tills were ringing with festive cheer once again.
Overall spending on groceries, which saw sales of Christmas dinner items broadly flat, hit £11.7 billion over the four weeks to 26 December; although that is 0.2% down on 2020’s record-breaking figures, when strict coronavirus restrictions meant there were few options other than Christmas at home.
Looking ahead, the supply chain issue could potentially create some more problems of its own, but the bigger drag on the supermarket groups’ bottom line could be inflation. According to Kantar, grocery price inflation, which tracks how quickly the cost of food items increases over time, reached 3.5% in December, adding nearly £15 to a shopper’s average monthly grocery bill.
The higher cost of living is something that the supermarkets are likely to feel the impact of. And it’s not the only issue they face - the food and drink industry has also warned of a “terrifying” impact on consumer prices as a result of the soaring costs of raw materials and ingredients being forced on to customers.
After a much-welcomed festive spending spree, the risk now is that shoppers could find they have no choice but to tighten their belts this new year and that is not what retailers will want to hear.
But the ‘Big Four’ of which Tesco and Sainsbury’s are two, have more to contend with over the next 12 months than ‘simply’ supply chains and a consumer crunch. While the pandemic has undeniably helped the big supermarket chains increase their dominance over the groceries market, they still have plenty to keep an eye on. From the potentially expanding remit of the supermarkets watchdog, the Groceries Code Adjudicator, to the next moves from their old sparing partners, Aldi and Lidl.
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