10th Jan 2022 15:18
(Alliance News) - London-listed grocers got a boost on Monday after German discount peer Aldi reported bumper festive trading.
Aldi's sales rose 0.4% yearly in December. The sales climb came despite the same month in the previous year seeing bumper grocery spend due to lockdown measures.
"The Christmas shopping season is akin to the world cup for retailers and Aldi UK is on a winning streak, not just notching up record sales but attracting half a million new customers. It pulled off the impressive tactic of pulling in shoppers attracted by a bargain, and upselling premium products to them, with trollies piled high with luxury treats and alcohol," Hargreaves Lansdown analyst Susannah Streeter commented.
"That's no mean feat at a time when millions of consumers are facing an income squeeze, but it seems shoppers were determined to have a blow-out Christmas after the previous celebrations were dampened by lockdowns."
Aldi was boosted by more turning to in-person grocery trips, Streeter added.
Streeter added: "Tesco which has also positioned itself at the value end of the grocery with its ongoing efforts to reduce prices across key items saw its share price lift."
J Sainsbury PLC and Marks & Spencer Group PLC also rose, "amid expectations that they also benefited from the Christmas splurge", Streeter commented.
Tesco PLC shares were 1.3% higher, Sainsbury's was 1.8% higher, while M&S rose 0.6%. Online-only grocer Ocado PLC was down 0.2%.
While grocers are set to have enjoyed a decent festive period, the outlook for 2022 is slightly trickier, as inflationary pressures continue.
Streeter added: "The risk is that going forward customers may concentrate spend on essentials which are lower margin instead of splashing the cash on premium ranges or homewares which are more profitable for the retailers."
Sainsbury's and M&S reports on festive trading on Wednesday, before Tesco on Thursday. Ocado is penned to update the market with its full year results on February 8.
By Eric Cunha; [email protected]
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