Supermarkets had a record Christmas - but prices are rising

Helen Cahill
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Supermarkets had a record Christmas period in 2016, with sales growing at their fastest rate since June 2014, but prices are finally starting to rise following the Brexit vote.

The latest figures from Kantar Woldpanel show that sales were up 1.8 per cent for the 12 weeks ending 1 January. Consumers spent nearly half a billion pounds more - £480m - than the year before.

Read more: Manufacturing giant Premier Foods considers price rises due to Brexit vote

But there were signs of the first price hikes feeding through from the devaluation of sterling. Following two years of deflation, like-for-like grocery prices increased 0.2 percentage points. Price rises will vary depending on product, Kantar said; fish and butter prices became more expensive, while eggs and bacon became cheaper.

The news comes as City A.M. revealed that the manufacturer behind Bisto and Oxo cubes is increasing its prices.

Read more: UK retail scores healthy but unspectacular" end to 2016

The supermarkets' share prices rose in morning trading on the good news:

  • Tesco's share price was up 3.36 per cent
  • Sainsbury's share price was up 1.73 per cent
  • Morrisons' share price increased 3.54 per cent

Sainsbury's share price was lagging behind its peers after Kantar said its sales fell 0.1 per cent. Asda's sales were down 2.4 per cent as it continued to be squeezed by German discounters Aldi and Lidl.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: "With Christmas Eve falling on a Saturday and giving shoppers more time to buy their final festive trimmings, the single busiest shopping day of the year was Friday 23 December with over half the population braving a grocery store.

"The typical household spend for December reached £365 this year – £52 more than the average month."

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