Food and grocery spending will grow faster than other retail sectors this year, with shoppers spending £2.8bn (5.9%) more through the quarter than they did last year, new data predicts.
The figures from GlobalData reflect the impact of price increases over the past 12 months outweighing any recent month-on-month declines.
Nick Gladding, Lead Retail Analyst at GlobalData, 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 set to raise their game and emphasize quality and breadth of range. 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.”
The only other major sector to experience increased sales year-on-year will be health and beauty, which is set to benefit from retailers stepping up their gifting and pampering offers. The inexpensive nature of many beauty items is likely to make them popular choices for shoppers on tight budgets.
However, the continuing pressures on shoppers are evident from GlobalData’s latest retail spending index, which is calculated by subtracting the number of households that say they will reduce their spending from those that will increase it. At -56.4, the index remains very negative despite being slightly less so than a year ago, suggesting that retailers will need to inspire shoppers and emphasise value to encourage them to spend.
