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Market Commentary

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Weekly Retail & Leisure News - 18​​​​​​​​​​​​​​​​​ January, 2016​​​​​​

​​Christmas Trading: Winners in the grocery sector revealed

The clear Christmas winners in the grocery sector appear to be the discounters this year, as nearly 16 million households were attracted to Aldi and Lidl in the 12 weeks to January 3. Lidl had its most successful Christmas yet with sales rising 18.4% to £1.1bn in the same period. Aldi saw a 13.3% increase in sales in this period, according to Kantar Worldpanel. The discounters’ effect on the rest of the market was evident from the 1.8% year-on-year drop in the price of groceries during the three months period.

However, Tesco, Morrisons and Sainsbury’s all announced Christmas trading results above expectations, and appear to be fighting back. Tesco’s LFLs rose 1.3% in the 6 weeks to January 9, prompting its share price to soar; however total sales were down 1.2%. Sales at Morrisons rose for the first time in almost four years, with LFLs up 0.2% in the nine weeks to January 3. Sainsbury's LFLs fell 0.4%, but total sales rose 0.8% in the 15 weeks to January 9. Kantar’s data showed that Sainsbury's was the only one of the Big Four to grow sales and market share in the 12 weeks to January 3, as it announced plans to double its Netto trial. Sales at Asda dropped 3.5% in the same period, according to Kantar.

Results from the upmarket grocers were mixed over Christmas, due to the fierce competition and price deflation. Waitrose suffered its worst Christmas since 2006, posting a 1.4% fall in LFLs during the six weeks to January 2. And northern grocer, Booths revealed that its LFLs slipped 1.4% between December 13 and January 2, impacted by the floods, while total sales rose 5.9%. However, M&S’s food division celebrated its best ever Christmas as its LFLs rose 0.4% in the 13 weeks to December 26.​​​​​​​​

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