Food and grocery will be the fastest growing sector in the run up to Christmas, according to the latest predictions from GlobalData.
It estimates that shoppers will spend £2.8bn more through the fourth quarter of 2023 than they did last year. According to the data and analytics company, this reflects the impact of price increases over the last 12 months outweighing any recent month-on-month declines.
Lead retail analyst, Nick Gladding, said: “This year GlobalData expects a record number of shoppers to shop at discounters as their keen pricing and strong seasonal offers attract high levels of footfall.
“Discounter expansion is forcing the competitor to raise their game and emphasize quality and breadth of range.”
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“M&S has already taken steps in this direction with its new pre-Christmas ‘it’s never been just food’ campaign while Tesco will make even more extensive use of Clubcard Prices this Christmas to offer enticing promotions to its loyalty scheme members which should boost basket sizes.”
GlobalData said that while a 9.3% increase in retail prices is expected to drive up spend by 3.4%, this falls short of last year’s rise and marks a second quarter of slowing growth in 2023.
The 3.4% increase will take retail spend to £109.7bn in the fourth quarter, however this is just over half of the 6.2% achieved last year.
Gladding added: “This year’s growth in retail sales is driven by inflation. Sharply higher prices mean shoppers will spend less in real terms than last year, choosing either to trade down or trim the number of presents they buy.
“Last year sales growth was supported by shoppers spending savings built up during the lockdown. But those savings now depleted by cost-of-living increases and mortgage rate hikes, consumers are likely to shop more cautiously and more savvily.”
