Christmas spend to hit £16bn with discounters to win share

Total retail spend on Christmas throughout 2015 is forecast to rise 1.3% from £15.8bn in 2014, with spending on food and grocery increasing to £5bn, according to analysts Conlumino.

Last year Tesco led the retail Christmas market after scooping 16.5% of spend, but the popularity of discounters will continue to rise as an increasing number of shoppers buy Christmas staples and all the trimmings from Aldi and Lidl.

Conlumino said Asda’s share of Christmas retail spend hit 12.1% last year with Sainsbury’s scooping 10.2%.

Conlumino retail analyst Greg Bromley said: “Aldi and Lidl introducing premium ranges to rival the likes of Tesco finest to their Christmas offer means customers won’t overlook them for their main festive food shop.

“People now see the quality of Aldi and Lidl’s food as being as good as and even higher than that of the big four.”

Bromley said this shift in perception by shoppers, who in previous years may have bought a few items from discounters but were less likely to do their full Christmas shop with them, has been caused by several factors.

Aldi and Lidl winning prizes on the quality of their food combined with the ongoing media attention and price battle amongst the grocers has meant shoppers believe they can now spend less with a discounter without compromising quality.

“Perception of quality for the big four has remained static whilst it has improved significantly for the discounters” said Bromley.

General merchandise is set to be another area that discounters will disrupt this festive season.

Conlumino forecast that total spend on seasonal non-food items will rise 0.1% this year to £2bn and spend of gifts will grow 2.1% on 2014 to £9bn.

Bromley said shoppers will increasingly head to discount retailers such as B&M and Home Bargains as well as single price retailers like Poundland for purchases in both these areas.

While an increase in individual spend on gifts is likely to be marginal how people are spending their money this year will change, as shoppers are likely to buy a larger volume of smaller gifts and fewer big-ticket items.

“Discount retailers are monopolising on this trend by expanding their product ranges around seasonal periods such as Christmas, Halloween and Valentine’s Day,” said Bromley.

“Non-food spend for the big four is important so the increasingly popularity of general merchandise discount retailers is a threat.”

Bromley predicts that shopping patterns this Christmas will be more consistent than they were last year as Black Friday shifted from a one-day shopping event to retailers spreading discounts out over a few weeks.

“Extension of the Black Friday period means there is unlikely to be a massive lull in spending like last year and the warmer weather should draw more people to the high street over the next few weeks” said Bromely, who predicted Christmas spending will peak from the weekend of December 19^th onwards.