Sales are up but value falls as UK Christmas shoppers opt for cheaper food

By Niamh Michail contact

- Last updated on GMT

Sales are up but value falls as UK Christmas shoppers opt for cheaper food

Related tags: Christmas

UK consumers bought more Christmas products but opted for cheaper versions of them, IRI data has shown, with traditional retailers feeling the downward price pressure of hard discounters.

Confectionery and cakes, such as mince pies and Christmas pudding, performed well with an 8.3% increase on 2014 thanks to indulgence and gift-buying but there was less festive cheer for processed meats and fresh produce.

A 15% rise in sales of turkey and other fresh poultry excluding chicken only yielded a 7.5% increase in value, while sales of Brussels sprouts also rose in volume but saw an 11.5% fall in value. The market analysis firm put this down to a general decline in wholesale prices of fresh produce as well as stiff competition from discounters.

Last year IRI data showed a drop in sales across food and drink categories during the first two weeks of the traditional Christmas trading period which officially begins halfway through November. Analysts at the time attributed this to the rise of hard discounters, such as Aldi and Lidl, against which traditional grocery outlets were struggling to compete.

But this year’s sales were positive in this respect. IRI analyst Martin Wood told us: “The good news is that in spite of the growth of the discounters and the online-only operators, this Christmas has shown that the traditional supermarkets can still drive volumes, so provided manufacturers manage their costs (and of course the reduced price of fuel is a help) they should find that revenues can still increase with lower prices."

Total food sales totalled £2.3 billion (€1.4bn), up 8.8% on 2014.

A bacon of light for processed meats

Processed meat is continuing to fare badly following the World Health Organisation’s report which classified it as a known carcinogen, with drops in both volume (-5%) and value (-6%). Bacon was hit the worst with an 11% in sales even during the Christmas week, meaning fewer Brits enjoyed those traditional Christmas trimmings.

Martin Woods told this publication he expects this downward trend, which has been running at between 10% and 15% lower than 2014, to continue into 2016.

I expect the rate of decline to ease off a bit later in 2016 as the one-off negative impact of the announcement works through the year-on-year figures, but sales of bacon, sausages and gammon will continue to decline - they were doing anyway. The one beacon is that as consumers become more selective and see these products as a treat, sales of more premium products and cuts may have a more positive future."

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