Recession fears fail to silence the Christmas tills

The tills of the big supermarket chains are expected to jingle non-stop as shoppers in the UK spend a record 4.25bn on food in Christmas week, say retail analysts.

Each household is expected to lavish almost 200 on Yuletide groceries this year, more than 20 more each than in 2006.

The big supermarket chains have had a strong month on the back of record promotional activity, cutting prices and offering two for the price of one, according to analysts AC Nielsen.

Spending on food is more buoyant than expected following the Northern Rock crisis and the worsening global economic outlook, which had threatened to ruin Christmas for retailers.

Mike Watkins, the head of business insight at AC Nielsen, said: "The Northern Rock and the credit crunch was a potential show stopper but we have got through that." But he said Tesco and the other grocery chains were cutting the price of a record 30 per cent of everything to ensure money flowed through the tills.

Sales for the eight weeks to 8 December were 4.2 per cent up year on year, down on last year's 5.5 per cent growth.

Shoppers were continuing to buy more premium products branded "fine" or special by retailers, but were spending less on discretionary treats.

Non-food retailers are expected to experience slower rates of growth as consumers become more cautious about expensive items in the wake of the sub-prime mortgage crisis in the United States.

John Lewis said takings at its new food hall in Oxford Street, London, which stocks luxury products, were up 50 per cent on the previous week.

AC Nielsen says Saturday will be the biggest grocery shopping day of the year as Britons load up on turkeys, potatoes, Brussels sprouts for the Christmas dinner.

Drink sales are also expected to do well on "Scramble Saturday", with heavy promotions on champagne and beer.

Overall, TNS forecasts supermarkets will take 4.25bn during the Christmas week, up 13 per cent on last year.

This year Christmas Day falls on a Tuesday, giving shoppers the whole weekend and Monday to stock up on supplies.

Edward Garner, research director for TNS Worldpanel, said that in the past "extra" shopping days before Christmas had pushed up takings during Christmas week by 15 to 20 per cent. "Retailers must be ready for the record demand we are expecting this Christmas week," he said.

"Many people will be off work on Christmas Eve this year and we will be doing last-minute shopping, especially for fresh goods.

"It is essential for retailers to ensure there is enough stock."

He warned that any retailer running out of supplies would find shoppers defecting to their rivals. TNS expects households to spend 200 on food at Christmas, 20 more than last year.

Seasonal food trends

CHAMPAGNE

The bubbly is doing well this year, according to John Lewis, with Bredon, Moët & Chandon and Waitrose Brut champagne popular. Sainsbury's expects to sell one million bottles of champagne at Christmas. Harvey Nichols' wine buyer, Rob Graves, says: "Champagne is proving as popular as ever around Christmas but we notice that a number of our customers are becoming more champagne savvy and experimenting with non vintage offerings from smaller growers."

PUDDINGS

Alternatives to Christmas pudding are popular. Sales of stollen and panettone are up 50 per cent on last year at Marks & Spencer. Selfridges says: "Panettone is huge this year, a top-selling gift is the Selfridges hat box with a delicious panettone."

CHEESE

Cheese boards holding a convenient range of sliced cheeses are whizzing off the shelves. John Lewis says: "Bespoke regionalised cheese boards are selling very well; the English box, containing Colstonbassett, Denhay West Country cheddar and Tunworth cheeses has proved particularly popular."

TURKEY

Sales of organic turkeys are 40 per cent plumper at Marks & Spencer and the chain expects to sell more than a million for the first time. Other organic products such as shortbread are doing well.

BEEF

Shoppers are experimenting with other meats at Christmas. Beef sales are treble the level of last year at Selfridges, in particular rare breeds such as Bickleigh White Park. Harvey Nichols fresh food buyer, Simon Hurrell, says: "We have seen a rise in exotic and luxury meats this year such as Norwegian reindeer or biodynamic beef. People are becoming more inventive with food and Christmas is a great time to highlight their culinary skills such as roast strip loin of reindeer or reindeer Carpaccio."