Food sales experienced a notable increase of 2.4% over the past three months leading to November, amidst a growing desire among consumers to spend more this Christmas, according to the latest report from the British Retail Consortium (BRC)-KPMG.
While this growth falls short of the 12-month average increase of 3.7%, it indicates a positive year-on-year performance for November, marking food as one of the few categories with enhanced sales both online and in-store.
Sarah Bradbury, CEO of IGD, highlighted the trends in the grocery market, noting a growth in both value and volume. She stated, “November’s grocery market performance shows year on year growth in both value and volume. IGD’s latest research highlights signs of festive cheer, with 5% more shoppers than last year (41% vs 36% in 2023) planning to spend what they want this Christmas.”
However, she cautioned that not all consumers will indulge lavishly this season. Budgetary concerns remain prominent, keeping overall spending restrained, particularly regarding out-of-home activities.
The report also noted a 3.3% decline in total UK retail sales from the previous year, a stark contrast to the 2.6% growth in November 2023. Helen Dickinson, chief executive of BRC, attributed the drop in part to the shift of Black Friday sales into December’s figures this year. Dickinson stated, “Low consumer confidence and rising energy bills have clearly dented non-food spending. Retailers will be hoping that seasonal spending is delayed not diminished and that customers get spending in the remaining weeks running up to Christmas.”
Amidst these challenges, retailers face a potentially tough fiscal year ahead if current consumer spending patterns persist. Any permanent reduction in consumer expenditure could result in significant pressure from reduced revenues alongside escalating operational costs.
Despite the challenges in the broader retail market, the increase in food sales and the intention of shoppers to spend more this Christmas offers a glimmer of optimism. Retailers remain hopeful that this trend will continue into the festive season, providing a crucial boost during a traditionally peak time for sales.
