UK inflation: People spent £13.7bn on discount-buying on Christmas

UK consumers spent £13.7 billion on groceries leading up to Christmas, a 7% increase from the previous year, as they actively pursued discounts and turned to discount retailers to counterbalance rising prices. The number of items purchased saw a 2% increase in December, even as prices rose by 6.7%. This represented a notable drop from November’s 9.6%, marking the largest monthly decline in inflation recorded by data firm Kantar.

Noteworthy was the increase in prices for sweets, eggs, and frozen potato products, while dairy items such as butter, milk, and cream experienced a decrease in prices. With tight household budgets and fierce competition among major chains for holiday shopping, nearly one-third of all spending during the four weeks went toward discounted items, reaching the highest level since December 2020.

During the month, British consumers made 488 million visits to supermarkets, marking the busiest festive period since 2019. This surge in activity reflected a return to multiple trips in search of bargains, a shopping behavior that had shifted during the COVID-19 pandemic.

Fraser McKevitt, head of retail and consumer insight at Kantar, noted that Christmas shopping in 2023 surpassed expectations. The day before Christmas Eve, December 22, emerged as the most popular shopping day, with over 25 million trips and £803 million spent in physical stores—85% more than the average Friday in 2023. While the inflation rate experienced the fastest decrease ever recorded, consumers still faced significant budget pressures. McKevitt highlighted retailers’ efforts to provide value and attract shoppers during the festive period.

The demand for Christmas dinner items was robust, driven by heavy discounts, resulting in increased sales volumes for parsnips, sprouts, potatoes, and festive meats like pigs in blankets, sausages, hams, and turkeys. However, mince pies and Christmas puddings saw a decline in popularity.

Kantar reported that Aldi and Lidl were the fastest-growing grocery chains, with sales increasing by 13.8% and 9.9%, respectively, in the three months leading up to December 25. While Tesco and Sainsbury’s gained market share, with Sainsbury’s achieving its highest level since 2020, Asda lost market share, and Morrisons had the lowest sales growth among major chains.

Despite an increase in store visits, online’s share of the grocery market remained steady at 11.6%, with almost one in five households opting for delivery in time for Christmas, contributing to the traditional supermarkets’ ability to withstand competition from discounters that do not offer online grocery services.

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