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Grocery spend hits record level in final quarter of 2019, but retailers suffer grim Christmas as sales growth slumps to four-year low

The latest data from Kantar showed that UK shoppers tightened their purse strings over the festive period

Tesco PLC - Grocery spend hits record level in final quarter of 2019, but retailers suffer grim Christmas as sales growth slumps to four-year low

Grocery sales in the final ‘golden quarter’ of 2019 managed to hit record levels, according to the latest Kantar data, however, there was little cheer for retailers over the Christmas period as festive sales growth slowed to its lowest level since 2015.

In the 12 weeks to 29 December, Kantar reported that supermarket sales rose 0.2% year-on-year (YOY) to £29.3bn, with the trend of the ‘big four’ grocers losing ground the German discounters continuing apace.

READ: Morrisons fails to find any Christmas cheer as sales slide

Fraser McKevitt, head of retail and consumer insight at Kantar, said that there had been “no sign of a post-election rush” that many had hoped would boost sales over the Christmas period, with customers instead cutting back on festive indulgences.

Sales of Christmas puddings fell 16% YOY while seasonal biscuits were down 11%. Turkey sales also dipped 1% as consumers opted for smaller and cheaper cuts such as crowns instead of whole birds.

UK punters were also popping fewer corks this year, with sparkling wine sales down 8%, although beer and still wine sales rose 1% and 2% respectively.

Tesco retains top spot but discounters continue rapid growth

In terms of market share, Tesco PLC (LON:TSCO) retained its top spot as the UK’s biggest supermarket in the final quarter of the 2010s with a market share of 27.4%, although this was down 1.5% YOY, J Sainsbury PLC (LON:SBRY) was in second place with a 0.7% YOY decline to 16%.

Walmart Inc (NYSE:WMT)-owned Asda was the third-largest grocer with a 2.2% fall in market share to 2.2%, while Morrisons was the lowest of the ‘big four’ with the largest decline of 2.9% to 10.3%.

The German discounters, meanwhile, continued their ascendency, with Lidl reporting the largest YOY increase in market share for a brick and mortar grocer of 10.3% to 5.9% while Aldi rose 5.9% to 7.8%.

“At the end of the decade, it’s worth remembering just how quickly Lidl and Aldi have grown. Their current combined market share of 13.7% is more than treble what they held in December 2009, an unprecedented increase over the course of ten years”, McKevitt said.

Online delivery giant Ocado Group PLC (LON:OCDO) took the prize for the biggest increase across all the grocers, rising 12.5% YOY to 1.3% market share.

Elsewhere, the Co-op and Iceland saw their market share increased 3% YOY to 6.1% and 1.3% to 2.3% respectively, while Waitrose fell 0.9% to 5%.

Shares in Tesco were 0.4% higher at 255p in early deals on Tuesday, with Sainsbury’s up 1.7% at 230.4p, Morrisons 2.7% higher at 197.6p, and Ocado up 0.9% to 1,283.5p.

Quick facts: Tesco PLC

Price: 219.1 GBX

Market: LSE
Market Cap: £21.46 billion

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