Positive Tesco Christmas results as sales soared

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Despite positive trading results from both Tesco and Sainsbury’s over Christmas, times remain extremely tough for retailers in this space now and grocery has always been a slim margins category. While this is a category consumers have to shop, it’s certainly one where they will seek to trim down spending now that Christmas is over, and consider how frequently they need to be buying.

Both supermarkets have effectively switched up their positioning by price matching, placing them closer in alignment with some of their low-cost competitors – a smart move, but one that may impact brand perceptions long-term.

Overall, grocers really have no choice but to do what they can to maintain good standing in consumers’ eyes by lessening the impact of the cost-of-living crisis for them. As time goes on, I would expect promotions that reward larger baskets to become more prevalent- anything that can simulate a loyalty programme, but in alternatively creative ways, will be beneficial for retailers and shoppers alike. I could see something like a basket-sharing package becoming an offering, where multiple families split the cost of receiving pre-determined grocery bundles (designed by the retailer based on inventory) that they can distribute amongst themselves depending on preferences.

Similarly, subscription services and delayed financing programmes may start to make even more sense for this category as both parties feel the intense pinch.