Christmas could rescue the multiples from a dismal November

By Jo Gilbert

Published: 14 December, 2016

Shoppers might have been happy with their purchases but Black Friday failed to bring a boost to supermarkets when the shopping holiday landed on November 26.

After a brief recovery, UK supermarket sales throughout November fell for the first time in five months due to a combination of Black Friday detracting from food purchases and falling prices as the Christmas offers kicked in.

Nielsen retail performance data for the four weeks to December 3 shows money taken at the till and the volume of goods sold both dropped -0.4% and -0.3% respectively compared to the same period a year ago - the first time this has happened since mid-July.

The value of general merchandise sales dropped 4.3% which was "partly a result of shoppers being distracted by heavily-advertised Black Friday deals by non-food retailers, particularly online," Nielsen's UK head of retailer and business insight, Mike Watkins, said.

Martin Lane, from www.money.co.uk shared his view: "Despite an air of uncertainty surrounding the UK since Brexit, big discounts in the run up to Black Friday kept the tills ringing throughout November. This should in theory mean happy retailers, but consumers are so used to bargains galore it's become the norm - a huge problem for shops because heavy discounting all year round just isn't sustainable.

"We could see stores really struggling in the next few months. Despite retailers best efforts we're likely to see households tighten their purse strings next year which would mean our highstreets could really suffer."

Supermarkets also saw less takings as baskets were cheaper due to stores starting their Christmas promotions - 29% of sales were on promotional items - and further regular price cuts.

The discounters weren't immune either.

Aldi's annual growth dropped into single figures (8.5%) for the first time in four years, while Lidl's 2.7% was six times smaller than its growth rate this time last year.

"After a strong start to November, shoppers seemed to have held back on food spend in the last few weeks, despite some the very attractive Christmas offers and price reductions," Watkins added.

However, an extra day's trading in the week before Christmas means the retail year should end on a high note.

"We expect momentum to pick up again and the week ending Christmas Eve will be a massive opportunity for the big four supermarkets to regain market share."

Nielsen estimates shoppers will spend around £4 billion at supermarkets in that week alone, with Thursday, December 22, expected to be the biggest day of the year.

"It's not been a great year for the leading supermarkets but an extra day's shopping available, with Christmas Day falling on a Sunday, means this year should end on a bit of a high note with more visits that week, and sales up versus last year despite the ongoing price deflation," Watkins said.

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