Supermarket FMCG sales reached £3.bn during a busy Christmas week (ending 26 December), an increase of 7.4% in value compared with 2014, according to the latest retail data from global insight leader IRI. Food sales totalled £2.3bn (+8.8%) while non-food sales reached £789 million (+3.8%).
Figures from IRI’s Retail Advantage, which measures sales from major UK grocery multiples, had already revealed that sales had been slow over the first two weeks in December (ending 12th), with shoppers spending -1.6% less in supermarkets than they did in 2014. But a bounce-back in the two week period ending 26 December saw overall FMCG sales surpass the previous year’s by 1.1%, with food up 1.6%. Non-food was still down -0.1% overall, in line with the long-term trend.
Within the food sector it was the Christmas Cakes, Pies, Puddings and Confectionery categories that saw the biggest surge in sales, after a slow start in the two weeks ending 12 December. Across the fortnight ending 26 December, sales of Christmas cakes and puddings were up 6.3% and Christmas confectionery up 8.8%. Christmas confectionery sales alone were up a massive 19% in Christmas week itself, reaching £119.8m.
“There was an extra peak shopping day in Christmas week 2015 compared with last year which helped push up the final week’s sales figures, but the level of growth does provide some good news for supermarkets,” commented Martin Wood, IRI’s head of strategic insight, retail solutions & innovation. “It shows people are feeling better off at last as wages rise and fuel prices come down, and also that shoppers have not completely abandoned mainstream retailers for the discounters. Competition with discounters has driven down prices, however, keeping value and revenues down even when volumes are up.
“The increase in sales of Christmas cakes, puddings and confectionery could be due to the ‘Bake-off effect’ giving people a taste for sweet things once again. They want to feature high quality cakes and desserts as centrepieces of their Christmas meal or party spread, but don’t have time to create these themselves. Premium Christmas confectionery also sold particularly well.”
Other highlights from IRI’s data covering the two-week period ending 26 December include:
Non-food categories are suffering from the growth of online retailers and digital formats. Sales of Electricals, Music and Gaming – products that supermarkets traditionally sold in huge volumes before Christmas – were down -22% in the two weeks to 26 December. However, revenues from Party Accessories increased by 18%, and Flowers and Plants by 8%, while sales of Toys (+20%) and Books and Other Gifts (+13.2%) also rose strongly as shoppers picked up presents alongside their food shop.
The buying of spirits, sparkling wine and craft beers as last-minute gifts as well as for entertaining led to a strong Christmas week for Beers, Wines and Spirits (+11.5% on 2014). Revenues from this category across the two-week period ending 26 December were up 3.6% compared with 2014, and up 1.7% overall in the six weeks leading up to Christmas. Shoppers still favour the mainstream supermarkets when it comes to alcoholic drinks, preferring the branded products which discounters are not able to offer.
We bought more traditional Christmas fare – but spent less on it. Fifteen per cent more turkey and other fresh poultry (excluding chicken) was sold in Christmas week compared with 2014, but this represented a value increase of only 7.5%. Over the two weeks ending 26 December the unit growth for poultry (excluding chicken) was 9%, but value sales were actually down -0.4%. Sales of sprouts rose in volume, but dropped -11.5% in value, reflecting the wholesale price declines in fresh produce generally, and the stiff competition with discounters for Christmas ingredients.
The decline in sales of Bacon, Gammon and Sausages continues. As expected, sales of these traditional accompaniments to Christmas dinner were down in volume (-5%) and value (-6%) in the two weeks to December 26 as people cut back following the WHO announcement confirming the link between processed meats and cancer. Bacon was the most badly affected, even dropping by -11% in Christmas week.
The table below includes value sales and growth/decline figures for the main categories covered by IRI’s retail data for the two weeks ending 26 December 2015:
2 w/e 26 Dec
|% YOY growth/decline|
|Books and Other Gifts||£27.5m||13.2%|
|Christmas and Gift Confectionery||£172.2m||8.8%|
|Christmas Stationery, Cards and Wrap||£81.0m||8.7%|
|Flowers and Garden||£65.7m||8.0%|
|Christmas Cakes and Puddings||£46.9m||6.3%|
|Beers, Wines and Spirits||£921.1m||3.6%|
|Christmas Dinner Accompaniments||£64.6m||1.5%|
|Fresh Poultry Excl Chicken||£106.5m||-0.4%|
|Cream and Speciality Cheese||£122.6m||-1.5%|
|Bacon, Gammon and Sausages||£111.9m||-6.4%|
|Electricals, Music and Gaming||£119.2m||-22.9%|