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Festive food spending up by £1bn on 2016 | |
(about 11 hours later) | |
Consumers spent £1bn more on groceries in the final 12 weeks of last year than in 2016, according to figures from market researcher Kantar Worldpanel. | |
The average household spent a record £1,054, while a record £469m was spent on premium own label lines. | |
Separately, a British Retail Consortium report said rising food costs meant people had less money for other items. | |
Like-for-like retail sales, which exclude new store sales, rose 0.6% last month, down on December 2016's 1% rise. | Like-for-like retail sales, which exclude new store sales, rose 0.6% last month, down on December 2016's 1% rise. |
The BRC said food sales accounted for most of the rise, with spending on non-food items such as clothing down sharply. | |
'Old favourites' | |
The Friday before Christmas was the busiest grocery shopping day ever recorded, according to the Kantar data. | |
A total of £747m was spent that day, 22 December, and Fraser McKevitt, head of retail and consumer insight at Kantar, said: "Shoppers are splashing out despite fewer promotions to tempt them. | |
"Only 36% of spending was on items on offer this year - the lowest level of promotional activity at Christmas since 2009." | |
Tesco was the fastest growing of the big supermarkets over the period, with sales up by 3.1% over the 12 weeks, while Aldi and Lidl were neck and neck in the chase to be the country's fastest growing supermarket overall, with sales rises of 16.8% year-on-year. | |
"In some ways Christmas is a tricky time for the discounters: they tend to lose a little market share compared to earlier in the year as many shoppers return to the more traditional supermarkets in search of old favourites," added Mr McKevitt. | |
"Rising to the challenge, Aldi and Lidl collectively managed to attract nearly one million additional households during the past three months." | |
'Stark divergence' | |
The BRC, which produces its data with consultancy KPMG, said shoppers' spending power "had been absorbed by essential items". | |
It said this had forced shops which did not sell food to discount heavily in the lead-up to Christmas to try and encourage shoppers to spend more. | It said this had forced shops which did not sell food to discount heavily in the lead-up to Christmas to try and encourage shoppers to spend more. |
Whilst this had helped boost overall sales, the BRC said it hit many retailers' profits for the period. | Whilst this had helped boost overall sales, the BRC said it hit many retailers' profits for the period. |
Over the three months to December last year, sales of non-food items fell 3.7% - marking their steepest drop in five years, the BRC's figures showed. | Over the three months to December last year, sales of non-food items fell 3.7% - marking their steepest drop in five years, the BRC's figures showed. |
Meanwhile, food sales for the same period rose 4.2%, their biggest rise in six months. | Meanwhile, food sales for the same period rose 4.2%, their biggest rise in six months. |
"The divergence between growth in sales of food and non-food has never been so stark," said BRC chief executive Helen Dickinson. | "The divergence between growth in sales of food and non-food has never been so stark," said BRC chief executive Helen Dickinson. |
Inflation is currently at a near six-year high of 3.1%, easily outpacing the growth in average earnings. | Inflation is currently at a near six-year high of 3.1%, easily outpacing the growth in average earnings. |
The latest official data shows that food inflation in particular has picked up, with prices for fish, oil and fats such as butter and chocolate all higher. | The latest official data shows that food inflation in particular has picked up, with prices for fish, oil and fats such as butter and chocolate all higher. |
This means that many shoppers are spending more on basic essentials. | This means that many shoppers are spending more on basic essentials. |
Major non-food retailers have already indicated that they are feeling the strain. | Major non-food retailers have already indicated that they are feeling the strain. |
On Monday, baby products chain Mothercare warned that annual profits would be substantially lower due to weak Christmas sales. | On Monday, baby products chain Mothercare warned that annual profits would be substantially lower due to weak Christmas sales. |
Last week, department store chain Debenhams issued a profit warning after reporting disappointing Christmas trading. | Last week, department store chain Debenhams issued a profit warning after reporting disappointing Christmas trading. |
It subsequently emerged that rival chain House of Fraser was seeking to reduce rents on some of its stores, suggesting that it too was struggling. | It subsequently emerged that rival chain House of Fraser was seeking to reduce rents on some of its stores, suggesting that it too was struggling. |
However, sales at Next unexpectedly rose over the Christmas period, prompting the fashion retailer to raise its profit forecast. | However, sales at Next unexpectedly rose over the Christmas period, prompting the fashion retailer to raise its profit forecast. |
Supermarket group Morrisons is due to report its festive trading figures later with Sainsbury, Marks & Spencer, Tesco, John Lewis and Waitrose set to report later in the week. | Supermarket group Morrisons is due to report its festive trading figures later with Sainsbury, Marks & Spencer, Tesco, John Lewis and Waitrose set to report later in the week. |
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