Poor supermarket Christmas trading, but good news for UK farmers

Major supermarkets have reported poor Christmas trading, but an increased focus on fresh produce and provenance should be good news for UK farmers.

Tesco’s Christmas and new year sales fell 2.4% in like-for-like sales compared with last year. Morrisons posted a 5.6% fall, while Sainsbury’s bucked the trend, increasing its Christmas sales by 0.2% compared with last year.

However, there was good news for UK farmers, said Edward Garner, director of Kantar Worldpanel. A renewed focus on fresh food, quality and provenance emerged last year as an important factor for shoppers post-horsemeat scandal.

This increasingly became a way for the Big Four to differentiate themselves from discounters like Lidl and Aldi who were increasing market share.

“As long as there is a level playing field on price, the ‘buy British’ argument is very strong and people are open to it – it implies we know where our food is coming from. The outlook for UK farmers for this year should be positive,” said Mr Garner.

Recent research conducted by Hanover Communications backs this up, showing that post-horsegate, British consumers were more confident about buying meat if the packaging had information about the producer (53%), and if all meat in a retailer was sourced from the UK (59%).

English lamb sale values increased 18% in the year ending 8 December 2013, although New Zealand lamb sale values rose 36% in the same time, according to figures from Kantar. Consumers spent 5% more on “home-produced” pork and 3% more on “home-produced” beef.

The movement from convenience to fresh food generally signalled more good news for UK farmers, said Mr Garner. Fresh produce sales increased across several categories, while frozen ready meals decreased by 6% according to Kantar figures.

In fresh categories (from all origins), British shoppers spent 6% more on poultry, 4% more on beef, 9% more on lamb, 2% more on pork, 10% more on vegetables and 3% more on milk.

However this was often due to increased prices rather than larger volumes.

Household purchases of beef fell by 4%, as some shoppers looked to cheaper alternatives like pork and chicken.

Overall lamb volumes rose 1%. More households bought lamb mince, steak and shoulder roasting joints, encouraged by increased promotional activity. However, the volume of lamb legs sold, reduced 13% on the year.

UK retailers percentage share of market – 12 weeks to 5 January 2014

Retailers market share pie larger font

(More on the horsemeat scandal)

See more