Christmas wine sales a big boost to UK retailers
It seems when it comes to buying our festive wine then it is the major supermarkets where we are still quite happy to turn to. Despite a year of troubled sales most of the major UK chains reported strong Christmas and New Year sales with wine and alcohol overall a key traffic driver.
For the four weeks up to December 31st 2016 the total sales for food and beverages were up 3.3% in the UK off-trade compared to the same period a year ago according to figures from Nielsen. But noticeably it was wines, beers and spirits that outshone the market with sales up 5.7%, with soft drinks by contrast up by 4.3%.
Mike Watkins, head of Neilsen’s UK retailer and business insights, said: “Shoppers delayed grocery purchasing to such a degree that it caused a huge surge in sales in the week ending Christmas Eve, with sales rising 22% compared to the same week the year before.”
He added: “Spend in that final two weeks alone was £5.95bn. The remarkable buoyancy in shoppers spending freely in the final two weeks of the year to enjoy the festivities was good news for retailers considering the consumer head winds expected in 2017 with the return of cost price inflation – after three years of deflation – plus the ongoing uncertainty about the impact of Brexit on UK grocery sales.”
Tesco and Sainsbury’s both enjoyed good festive sales which will be a boost to the major grocers after another troubled year. Tesco said its sales for the last 19 weeks of the year were up 1.4% and 0.7% for the last seven weeks and Sainsbury’s was up 0.1%. But they again were behind the competition at either end of the scale.
Waitrose said its sales were up 2.8% over Christmas, whilst Morrisons posted a 2.9%, its best performance in seven years.
Majestic Wine also recorded it’s best ever Christmas period, with figures up by 12.4% across the group. This was achieved by particularly strong sparkling wine sales, which were up by 12%, and prosecco sales increasing three times faster than Champagne.
The retailer, which also owns the Naked Wine website, said sales at established Majestic Wine stores were up by 7.5% in the 10 weeks to 2nd January, while sales at Naked rose by nearly 30% and by over 62% at the fine wine specialist Lay & Wheeler.
“With Christmas trading making up almost a third of the retailer’s annual sales, it was important that Majestic performed well,” said Sarah Johns, an analyst at Verdict Retail. “The retailer’s decision to compete with discounters on price resulted in a marginal fall in gross margins. However, this move was ultimately the right one as savvy consumers looked for the best deals on drinks and Majestic’s offers proved alluring.”
Aldi enjoyed the biggest year on year Christmas growth in the UK for the 12 weeks leading up to Christmas. Its sales were up by 10.4%, attracting an extra million new shoppers compared to the year before, and selling more than two million bottles of Prosecco.