Tesco and Sainsbury’s have been crowned the winners of Christmas by Kantar as the pair outperformed the rest of the grocery market.
Sales at Tesco rose 2.8% in the 13 weeks to 23 November, rising 3.8% in the six weeks to 4 January. It’s hold on the market rose to 28.5% – the highest of any supermarket – boosted by growth across its convenience, superstore and online channels.
Meanwhile, Sainsbury’s won grocery market share for the fifth consecutive Christmas as it enjoyed a 3.7% uptick in revenues for the 16 weeks to 4 January, and 3.8% for the festive period covering six weeks to 4 January.
As both supermarkets toast to their “biggest-ever” Christmases, what can Sainsbury’s and Tesco tell us about the main trading trends over the festive period?
It’s party season
Shoppers clearly wanted to make it a Christmas to remember. Tesco boss Ken Murphy said that shoppers were “willing to trade up” as it recorded a 15.5% sales growth in its premium Finest offer, which was off the back of “very strong growth” the year before.
More than 20 million customers shopped the range over the period, which Murphy said was a “real testament to the fact that [shoppers] love the innovation we put into the brand” and a “great performance by the Finest team”.
The supermarket sold over 1.4 million bottles of its Finest prosecco – it’s best selling “tipple”, Murphy pointed out – and over 18 million premium pigs in blankets.
While at Sainsbury’s, its Taste the Difference range also delivered a stellar performance with sales up 16%.
“We saw customers treat themselves this Christmas, which was really a key part of our really strong performance,” said Roberts.
Sainsbury’s reported that more than half of customers’ big basket shops contained a Taste the Difference product and that over a third of the 200 bottles of fizz sold every minute in the key days ahead of Christmas were from its premium line.
Value is still key
Despite shoppers loosening their purse strings with easing inflation, both Murphy and Roberts agree that value still played an important role over the festive period.
Murphy commented: “We had a very, very strong value proposition this Christmas and it really helped, because we did notice that customers were spreading their spend probably more than they have in previous years.”
“We saw a lot of early buyers into some of the big purchases, so frozen turkeys were up quite significantly this year, our meat joints, which we launched early this year, showed very strong growth, so you could see people managing their spend over the period.”
The grocery boss said that Tesco “went a little bit harder and really invested in value” over the third quarter, up two to three percentage points higher than Christmas 2023.
The supermarket invested in value to deliver a full Christmas dinner for just £1.84 per person, making the price 12% lower than last year.
Likewise, Roberts said Sainsbury’s exited the year with “one of the strongest value positions we’ve had in a very long period of time,” and that he “intends to make sure we maintain that”.
He added: “What we’re seeing in terms of the food customer is very value driven and more promotional driven, and that’s where Nectar Prices is playing such an important role for us.”
Strong online performance
Shoppers leaned on the convenience of online delivery and quick commerce at Tesco in the run up to festivities.
The UK’s biggest grocer witnessed an 11% surge in online sales during the quarter and Christmas period, which included its “biggest ever week” during the run up to the big day.
Murphy noted that Tesco’s rapid delivery service Whoosh played an important role for shoppers, “helping them shop whenever and however they wanted as they got ready for those important festive celebrations”.
The service, which saw more than 1.2m orders placed, was rolled out to 32 large stores in addition to over 1400 Express stores around the country, just in the time for the festive period.
Gamification and loyalty
Both Tesco and Sainsbury’s used gamification over Christmas to entice shoppers to spend in-store and online.
Tesco’s Clubcard remained prominent as ever, with Murphy explaining “customers continued to benefit from increasing personalisation and great value”.
The grocery giant ran a personalised Clubcard challenges promotion to 10 million shoppers over the period, which it said contributed to a record level of digital engagement.
Murphy said the promo saw customers collect “over half a billion extra Clubcard points”.
Meanwhile, Sainsbury’s enjoyed a rush of customers using their Nectar scheme over the festive period as it extended its exclusive member prices to cover over 9000 products.
It saw record numbers of customers shopping Nectar Prices, which extended to over 9,000 products in the run up to the holiday and helped to save an average of £26 per shop.
The supermarket chain also reported that more than a million shoppers participated in its annual count up to Christmas campaign, collecting additional points to spend over the festive period.
Last-minute rush
Roberts explained Sainsbury’s saw customers leave their big Christmas shop “later than ever” this year.
He said this meant it experienced some “really big days in the last two or three days into Christmas” and delivered its “highest ever sales in those final days leading up to Christmas”.
However, Roberts explained that the business was “well prepared” for its slew of last minute shoppers.
“We made clear plans up front and really targeted our plans to make sure we were ready for that late peak, particularly on fresh food, and that meant we delivered a really strong customer and operational performance,” he said.
“In fact, we had our best ever customer satisfaction performance through Christmas and our strongest availability ever too,” he added.
It’s local stores also played a key role for customers, with Roberts noting the business experienced “record days over the peak Christmas period in convenience”.
Last minute shoppers also dashed to their nearest Tesco, with the supermarket recording a “record-breaking” number of transactions from 12pm to 1pm on Christmas Eve.
Fresh produce and party food ranges surge
Consumer confidence in the run up to Christmas was much higher this year as the two supermarket giants reported strong sales across its fresh food and party ranges.
Roberts noted “areas in fresh food were particularly strong” and that it saw “produce sales substantially up year on year”.
“Our team did the most incredible job because we were getting so much fresh food through our stores, record volumes, which meant we had to be really well organized and we had to do the best job to make sure we maximize on shelf availability,” he added.
Roberts said the party food ranges “smashed records” at Sainsbury’s, with sales up nearly 40% and its chilled party lines up 56%.
Tesco’s Murphy noted fresh food sales were up 6%, which he said could indicate that “people had quite a healthy Christmas in some ways”.
The supermarket giant also sold over two million Turkeys and sales of meat joints were up 10.4% over the period.
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