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Big four supermarkets lose Christmas sales as ‘Boris bounce’ fails to appear | Business

Supermarkets recorded the slowest Christmas sales growth in at least four years as the big four chains lost sales, according to industry analysts.

While grocers took a record £29.3bn in the so-called golden quarter, the 0.2% rise in sales across the sector was the lowest rate of growth since 2015, said research firm Kantar. Rival analysts at Nielsen said the growth was the worst in five years as families had spent less on alcohol.

Morrisons, which on Tuesday revealed a 1.7% slide in sales in the 22 weeks to 5 January, said it had endured an “unusually challenging period for sales” as consumer confidence was subdued by concerns about Brexit and the wider economy.

The retailer’s chief executive, David Potts, said retailers had increased competition by using promotions.

“Consumers’ confidence, we can see in all the data, has been low over an extended period and that continued throughout the [Christmas] period. Our consumers were quite a bit more than savvy – they were quite cautious in the light of concerns about the macro environment for the country as well as their own personal finances,” Potts said.

He added that Morrisons might have lost out because it did not participate fully in the late November Black Friday promotional period which had previously acted as a “springboard for Christmas”.

Fraser McKevitt, head of retail and consumer insight at Kantar, said there had been little sign of a “Boris bounce” in the days after the 12 December general election. This is despite economic data this week suggesting that the wider UK economy enjoyed a post-poll boost last month.

“There was no sign of the post-election rush many had hoped for in the final weeks before Christmas, with shoppers carefully watching their budgets. In fact, many of us cut back on traditional and indulgent festive classics. Sales of Christmas puddings were down by 16%, while seasonal biscuits were 11% lower. Turkey sales also fell by 1%, partly down to a shift from whole birds to smaller and cheaper joints such as crowns,” McKevitt said.

He said the big supermarkets – Tesco, Sainsbury’s, Asda and Morrisons – had a particularly poor trading period as shoppers visited them less than usual. Morrisons was the worst-performing of the big four chains, but none achieved sales growth over the period according to Kantar. Sainsburys and Tesco will report their formal Christmas trading figures later this week.

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The traditional supermarkets are suffering as discounters Lidl and Aldi achieve rapid growth. Lidl was the fastest-growing physical retailer with sales up 10.3% in the 12 weeks to 29 December, taking its market share to 5.9%. Aldi’s sales rose 5.9% over the period according to Kantar. However, all the chains were outshone by online specialist Ocado which increased sales by 12.5%, taking its market share to 1.3%.

Morrisons said it expected to meet full-year profit expectations after controlling costs tightly but suggested that the market would continue to be tough in 2020 as the government attempts to finalise the terms of the UK’s exit from Europe.

“There is going to be uncertainty in the market until Brexit become clearer. It’s sort of had a Christmas break but it will be back I’m sure,” Potts said.

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