‘Tis the season: How can UK grocers drive up sales as we get closer to Christmas?

The ‘golden quarter’ is a critical trading period for grocery retailers. A celebratory time of year, grocers typically get a boost from shoppers socialising more and preparing for Christmas. However, this year has brought a fresh set of challenges as consistently high inflation has put a dampener on consumer confidence and tightened wallets.

With interest rates still high, the cost-of-living crisis has continued to impact purchasing trends. But what does this mean for the grocery market? How will overall grocery sales, and shopper habits, affect grocers Christmas draws ever closer?

Our new grocery spending report is based on spending analysis from over 20 million UK bank accounts, as well as polling of over 2,000 UK adults. It offers insight for retailers as we head into the final stretch of the golden quarter and offers strategies for enhancing customer loyalty at this critical time.

Discount Christmas?

Our research shows that consumers are increasingly turning to discounters and loyalty schemes as they face the ongoing cost-of-living crisis.  In fact, our polling suggests that the average shopper has seen their grocery bills increase by £644 this year.

In response to heightened costs, consumers are seeking discounts: over a quarter have turned to loyalty and reward schemes (28%) and online discount codes (26%), while 22% are browsing price comparison sites and a fifth of consumers are using cashback offers (20%) to manage expenses.

This search for value is also translating to what people are buying and from where. Almost two in five consumers are buying more own-brand supermarket products, and a quarter are switching to cheaper brands and discount chains. As Christmas approaches, 26%plan to cut back on presents, while 22% have curtailed big-ticket purchases.

As we approach Christmas, grocery spend is anticipated to rise as families opt for home-based celebrations, driven by ongoing high living costs.

Harnessing the trend of savvy shoppers, discount grocery retailers have undoubtedly benefited from a reputation for value, as well as a focus on deals and personalised offers. As a result, they’ve grown at a faster rate than the traditional ‘big four’ grocers. Discount grocery stores saw transactions increase by 2% between June and September this year, with consumer spend also increasing by 6%.

The big four supermarkets have seen a 5% increase in spend but a 4% decrease in transactions, signifying a shift to cheaper alternatives.

The run-up to Christmas represents an opportunity for the bigger supermarkets to reverse this movement. But doing so will require them to be smart with the way they market their food and drink. Leveraging the data and insights on customer preferences will be important to entice customers back as they start making bigger ticket purchases for parties and the all-important festive meals with friends and family.

Are you a grocer looking to get customers back through the door this festive period? Cardlytics offers extensive insight and marketing support for retailers, with access to spending data from over 20 million UK bank accounts.

By providing this ‘whole wallet view’ to grocers, you benefit from a deeper understanding of the competitive landscape and implement precise, targeted marketing that delivers tangible results. Heading into the final stretch of the Golden Quarter, we’re helping our customers leverage this data to drive incremental sales growth and retention, as consumers look to find the most value for money with their Christmas spending.