The retail frozen food market in the United Kingdom rang up sales worth £5.8 billion during the 52 weeks that ended on December 6, 2015, according to figures recently posted by Kantar Worldpanel. Sales have risen only slightly during a period of deflation over the past several years, as receipts were tallied at £5.7 billion for the 52 weeks ending on December 8, 2013.
Confectionery was the star performer in the frozen food category last year, registering a growth rate of 6.4%. Sales of ready meals and pizza rose 2.1% and 1.8%, respectively, compared to results in 2014.
“The three frozen food categories which have seen significant increase in value all highlight the continued trend of consumers seeking great-tasting, convenience food,” commented Brian Young, chief executive of the British Frozen Food Federation. “The UK’s frozen food market is steadily growing as consumers continue to demand convenient, high quality food.
“Santa” Delivers Cheaper Groceries
Meanwhile, overall grocery store sales figures in Britain published by Kantar Worldpanel for the 12 weeks ending January 3, 2016, showed a decline of 0.2% compared with last year’s numbers, due to continuing price deflation. However the discount retailers, Waitrose, the Co-operative and Sainsbury’s successfully grew ahead of the market and were the share winners over the yuletide season period.
Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, explained: “Shoppers reaped the benefit of falling prices at Christmastime, with groceries 1.8% cheaper than last year. The amount spent on a typical Christmas dinner fell even faster – down by 2.2% – mainly due to cheaper poultry and traditional vegetable trimmings. Alcohol sales spiked thanks to a surge in popularity for sparkling wines, including Champagne and Prosecco, which increased in value by 11%.”
Discounters Continue to Impact Market
Once again, Sainsbury’s was the best performing of the traditional supermarkets. Its premium Taste the Difference brand posted its biggest ever Christmas sales, and promotional efforts were concentrated on simple price cuts rather than complicated multi-buy deals. This helped attract an additional 114,000 shoppers, with sales increasing by 0.8% on last year.
The structural upheaval caused by discounters Aldi and Lidl continued into the Christmas period. Lidl was the fastest growing retailer overall, with sales up by 18.5%. An expanded product range, especially in its Deluxe premium line, encouraged consumers to increase their shopping volume, with average basket sizes up by 7% to £17.20. Aldi followed with an increase in sales of 13.3%.
“The discounters are continuing to establish themselves in the minds of British consumers – almost one in eight did their single biggest December shopping trip in Aldi or Lidl, on top of the 15.6 million households who visited at some point in the 12 weeks. That is an increase of nearly one million shoppers on last year, and their combined share is up from 8.3% last year to 9.7%,” said McKevitt. “Despite Aldi and Lidl’s success, consumers are still spending most of their money in more traditional supermarkets, particularly in December, and total discounter share has dipped from the 10.0% achieved just before Christmas.”
While Tesco sales fell by 2.7%, an investment in its “festive five” fruit and vegetable promotions meant it was an improvement on last month’s performance. The retailer’s share went down to 28.3%, with Asda and Morrisons also declining to 16.2% and 11.0%, respectively. Morrisons share loss was expected as it continues to feel the effects of recent store closures.
As usual, Waitrose benefited from shoppers trading up at Christmas, growing sales by 1.5% and taking share back up to 5.2%. The Co-operative also won share at Christmas for the first time since the Somerfield acquisition – its sales growth of 1.4% was enough for it to secure 6.0% of the market.
Update on Inflation
Grocery inflation in the UK now stands at -1.8% for the 12-week period ending January 3, 2016, as shoppers are paying less for a representative basket of groceries than they did in 2015. This is the 17th consecutive period of grocery price deflation. Falling prices reflect the impact of Aldi and Lidl and the market’s competitive response, as well as deflation in some major categories such as ice cream, frozen and non-frozen poultry, cheese, crisps, eggs and butter.
