Circle Insights

Impact of consumers’ changing Christmas spending on Grocery retailers

Valentins Kirillovs

Findings from our latest Cost of Living survey show that while this may be the most wonderful time of the year for some, this sentiment remains aspirational for others in the current climate. 

With Christmas spending behaviours changing across all demographic groups, where are consumers opting to shop during this festive period? Which retailers are appealing to which age ranges, and which are benefitting the most from the resurgence of consuming food and drinks at home during the festive period? 

Christmas grocery shopping behaviours breakdown

Despite a gradual decline in the perceived impact of the cost of living on households over the last 18 months, 63% of all respondents surveyed remain “somewhat concerned” or “very concerned” about the increased cost of food and drink this Christmas. The most concerned groups are those in the lower affluence Acorn categories, comprising 66-68% of respondents. On the other hand, the higher affluence Acorn categories of Established Affluence and Luxury Lifestyles are among those marginally less concerned about these increased costs, at 52% and 63% respectively.  

So, where are these shoppers turning to for their groceries? How much of an impact does ‘value for money’ messaging and promotional activity have on consumers’ purchasing decisions ahead of the festive season?  

Where are consumers shopping this holiday season?

When asked about their preferred Grocery retailer for their main Christmas shop this year, there was an uptick in consumers’ preference for Sainsbury’s (16% in 2023 versus 11% in 2022), and a pronounced drop in consumers’ interest in shopping at Aldi from 19% in 2022 to 13% in 2023.  

Sainsbury’s was the favourable choice for 20% of Boomers and older generations, while only 7% of Gen Z respondents said that their Christmas grocery shop takes place here, turning to Grocery retailers like Asda (19%) and Aldi (17%) instead. Tesco came out on top at 25% and was the most popular choice across all generations and Acorn categories. 

Differences between where those who are/aren’t concerned will shop

Among those concerned about the cost of F&B, there’s a nearly three-way tie for the second most popular retailer between Sainsbury’s, Asda and Aldi for main grocery shop at 16% for Asda, 15% for Sainsbury’s and 14% for Aldi. For those who are reportedly unconcerned, however, the split shifts to 17% for Sainsbury’s, 13% for Asda and just 9% for Aldi. 

With heightening concerns around the cost of food and drink, Grocery retailers looking to attract price-conscious customers in the run up to Christmas should focus on creating effective ‘value for money’ messaging and promotional offers. The fight to retain customer loyalty is in full swing, with the holiday season being a key period for major Grocery retailers to retain and gain customers.

Therefore, retailers that promote competitive pricing and supply exclusive Christmas deals and limited time offers will attract consumers who are on the hunt for the best deals during the holiday season and retain their loyalty. 

Resurgence of socialising and consuming food & drinks at home

When asked how important various social activities this Christmas were, 79% of respondents surveyed considered the most important to be ‘food and drink at home’. Gen Z and millennial respondents placed the most importance on this festive social activity at 84%, along with families with children at home at 87%. On the other hand, only 75% of baby boomers and older generations felt this way.  

In terms of Acorn categories, each category ranked this social activity as ‘most important’, with ‘gifting’ coming in second place. 

As the younger generations and families with children are often the demographics attending or hosting holiday festivities in their homes during this time of year, there is an evident increase in the purchasing of food and drinks to cater to the increase in home visitors. Hosts are likelier to opt into buying higher-quality foods and alcoholic beverages to ensure their guests have a memorable dining experience, which further contributes to the uptick in spending at various Grocery retailers during this time of year. 

How can CACI help?

As the cost of living continues to impact consumers and contribute to changes in spending behaviours ahead of the holidays, CACI can help you determine the impact that these changes may have on your business’ performance both in terms of its online halo and physical store network, how to navigate the changing behaviours of various Acorn groups and devise strategies for success at each of your store locations.  

To learn more about how you can futureproof your business through data-backed insights, please contact Valentins Kirillovs. 

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Valentins Kirillovs