Food price inflation surged to 3.7% in December, its highest level since March, helping drive a standout festive season for supermarkets.
Sales across major grocery chains rose by 2.1% in the four weeks leading up to 29 December compared to the same period last year, according to analysts at Kantar. However, the increase was largely underpinned by rising food prices, which jumped more than a full percentage point from November’s 2.6%.
Inflation, which has been creeping upward since July, accelerated sharply in December, driven by higher prices for confectionery, skincare products, and juices. As a result, average household spending on festive take-home groceries reached a record-breaking £460.
Tesco Leads the Pack as M&S Shines
Over the three months to the end of December, Tesco cemented its position as the UK’s market leader, increasing take-home grocery sales by 5% and claiming over 28% of market share.
Sainsbury’s followed with a 3.5% sales increase, while discount retailer Lidl posted an impressive 6.6% rise. Marks & Spencer saw the biggest leap, up 8.7%, reflecting strong demand for its premium products.
A Record-Breaking Christmas for Supermarkets
“It was a solid Christmas at the supermarkets, with sales surpassing £13bn during the four weeks of December for the first time ever, showing people were clearly in the mood to celebrate and spend,” said Fraser McKevitt, Kantar’s head of retail and consumer insight.
McKevitt highlighted consumer willingness to spend a little extra, noting that sales of branded goods grew by 4.2%, while premium own-label ranges surged by a remarkable 14.6%. Festive indulgences included sparkling wine and champagne, with sales climbing 4.4% to £187m in December. The trend extended to moderation as well, with 11% of the population purchasing no- or low-alcohol drinks—up from less than 10% the previous year.
Online Grocery Growth vs In-Store Comeback
Kantar’s data also revealed that more shoppers embraced online grocery shopping during December, with spending hitting a record £1.6bn.
However, NeilsenIQ analysts reported that the online share of the market dipped to 11.9% from 12.5% a year earlier, as price-conscious consumers flocked back to bricks-and-mortar stores, where visits rose by 8%. This marks a stark contrast to the ongoing trend of declining footfall in non-food retail.
As the festive season wraps up, supermarkets have reason to celebrate, but challenges remain—particularly for those struggling to keep up in a fiercely competitive market.
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