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By James Davey
LONDON, Jan 12 (Reuters) - British shoppers nervous about
the rapid spread of the Omicron coronavirus variant may have
kept away from bars and restaurants this Christmas, but they
made up for it at home, splashing out on champagne, upmarket
food and sportswear.
Following a difficult 2020 that ended with restrictions
being tightened again, Britons spent big in December 2021, with
supermarkets and retailers of clothing and homewares reporting
better than expected results so far.
"Customers really wanted to trade-up this year," Sainsbury's
chief executive Simon Roberts told reporters on
Wednesday, after Britain's second largest supermarket group
upgraded its full-year profit outlook.
The chain saw its highest ever sales of champagne and
sparkling wines, while sales of its "Taste the Difference"
premium range of food and drink were up 13% over Christmas on a
two-year basis.
Roberts' comments chimed with those of the British arms of
German discounters Aldi and Lidl.
Aldi said on Monday its premium "Specially Selected" range
notched up its highest ever sales in December, while it sold
over 5.5 million bottles of champagne, sparkling wine and
prosecco.
On Tuesday, Lidl reported sparkling wine sales in December
up 24% year-on-year.
Market researcher Kantar estimated that across the sector,
some 627 million pounds ($855 million) was spent on
supermarkets' own upmarket ranges in the four weeks to Dec. 26,
up 6.8% on 2020.
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Sainsbury's Roberts said the group had "planned big."
"So on the key Christmas lines we bought volume
substantially to reflect the fact that we thought customers
would want to celebrate Christmas in a big way," he said, noting
that groceries availability in the week before Christmas was
"where we wanted it to be" despite supply chain challenges.
Sainsbury's general merchandise business, which includes the
Argos chain, was hit by limited availability of technology,
gaming and toys, which dented sales. However, a focus on more
profitable sales boosted its profit margins.
That theme echoed comments from fashion retailer Next
last week.
Next said its stock levels in the run up to Christmas were
much lower than planned. But the strength of underlying consumer
demand still enabled the group to beat its expectations and
upgrade its annual profit forecast.
Similarly on Wednesday, sportswear retailer JD Sports
Fashion raised its profit outlook following strong
Christmas sales, despite supply chain disruption for some of its
key brand suppliers.
Homewares and furniture retailer Dunelm reported
record sales, helped by shoppers buying festive items when in
store, something they do not tend to do online.
Despite the upbeat mood there are still worrying signs on
the horizon.
UK consumers are facing a cost of living crisis due to
fast-rising inflation, surging energy bills and tax increases
which could upset discretionary spending.
Kantar noted that December sales of indigestion remedies
rose by 8%.
($1 = 0.7335 pounds)
(Reporting by James Davey Editing by Kate Holton and Mark
Potter)
