Discount supermarkets are set to win the battle for this year’s Christmas dinner table as Brits shun the mainstream high street brands and head to their cheaper rivals for their festive food, says Barclaycard.
Data from the UK’s leading payments business, which processes nearly half of all the country’s credit and debit card transactions, shows that so far this year discount supermarkets have seen growth of just under a third (31.1%), whilst mainstream supermarkets – including ‘the big four’ – have witnessed a 4.1% drop. The discounters have registered a 27.2% surge in transaction volumes, against a more modest 3.7% rise at major stores.
The average basket size for mainstream supermarkets has shrunk over the past year, dropping by 7% to £27 from £29 last year. In contrast, the average transaction value increased 3% – or £1 – for discounters, up to £24 this year. Coupled with a decline in average transaction volume growth at mainstream supermarkets, the data suggests stores are feeling the fallout of the fight for consumers.
The hard times will likely continue as the holiday season rapidly approaches. These merchants actually performed worse during Christmas 2013 compared with the rest of the year, with spend growth dropping from an annual average of 0.3% to -3.0% in November and December. Transaction volumes similarly fell 2.3% during Christmas versus the rest of the year.
In contrast, value merchants enjoyed robust growth, with spend rising from 25.8% in the first 10 months of the year to 26.9% in November and December. It was Scottish consumers that led the charge to the discounters, with spending up by an impressive 47.6%.
Despite spending at mainstream supermarkets declining overall, Northern Ireland proved to be a bright spot, with growth increasing by 8%.
Londoners proved the stingiest at the supermarket, reporting the smallest average basket size across the UK for both mainstream and discount retailers, at £25 and £20, respectively. This could possibly be attributed to a culture of dining out in the capital as well as Christmas socials and work parties.
Val Soranno Keating, CEO, Barclaycard said: “As the nation’s supermarket wars continue to hot up, consumer spending trends suggest value retailers will win the battle for the nation’s Christmas dinner. Over the past few years, cost-conscious shoppers have increasingly shifted their shopping to discounters and although they’re spending less, their more frequent visits are driving double-digit spend growth for value supermarkets.
“The appeal of value retailers is even more obvious at Christmas. In 2013, spend at discounters in November and December soared, while the mainstream retailers saw spending fall. Unless they up the stakes, the battle for Christmas looks tipped in favour of the discounters.”