Despite reports Morrisons’ disappointing Christmas was the result of minimal exposure to the online and convenience channels, analysis by FMCG market measurement and consulting firm SymphonyIRI Group shows a decline in sales volumes across major grocery stores over the important Christmas shopping period.
For the five week period up to 29 December 2012, the sales volume of all grocery products declined by 1.1% compared to the previous year to just under 6bn grocery items across all of the major UK supermarkets.
Sales value during this period increased by 1.7% to £10.7bn, reflecting the continued price increases facing already cash strapped grocery shoppers. However, the rate of price increase has declined over Christmas, mirroring recent figures from the British Retail Consortium that show a fall in food inflation during December from 4.6% to 4.1%, said SymphonyIRI Group.
Tim Eales, director of strategic insight at SymphonyIRI Group, said: “Retailers may be cautious about passing on price increases to shoppers who are struggling to absorb rising living costs but prices are rising regardless. Our analysis of the Christmas sales period, always an important seasonal sales event for grocers, shows shoppers are continuing to buy less to control their grocery basket cost. They have also been controlling the cost of their grocery shopping by trading down – buying more products on promotion and switching to lower cost alternatives to their usual purchases.
“We can expect the results to be similar across many grocers regardless of their cross channel strategies,” said Eales.
SymphonyIRI Group advises retailers as well as FMCG manufacturers to be brave about innovation and smarter about their use of promotions to drive sales volumes. Brands should also review their propositions for saliency and value in the face of continued pressure on shoppers.