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Produce and potatoes benefit from smaller Christmas celebrations

Covid-19 delivered a Christmas like no other. National and local lockdowns created a lot of uncertainty during the run up to the festive period, with many Christmas plans forced to change last minute due to government restrictions.

But all that uncertainty did not stop us from celebrating. 2020 was the biggest ever Christmas for food retail, with food and drink sales excluding alcohol growing by £912m to £8.1bn (Kantar, 4 w/e 27 Dec 20). However, this was not enough to outweigh the losses we saw in the out of home market, which declined by £1.4bn.

Fresh produce and potatoes
With more consumers cooking Christmas dinner at home due to restrictions, many areas of produce saw an increase in household penetration.

Image: AHDB 

Total potatoes, including fresh, frozen, chilled, crisps and snacks, grew by 12% in value, which is in line with the total market. Spend on fresh potatoes grew faster than ever but, at only +6%, they still lost market share.  Volumes grew more than spend (+14.1%) but some major supermarkets sold more potatoes on promotion, leading to an average price drop of 7%, down to only £0.53/kg. Promotions on fresh produce are part of many retailer strategies to encourage people in-store to do their big Christmas shop.

However, this is to the detriment of potato category value as they are a staple Christmas product and people need little encouragement to buy them at this time of year. Retailers with the biggest volume growth in fresh potatoes actually increased prices, proving that a change in consumer buying habits drove sales this year rather than promotions. However, this was a very different story last year, so it's one to watch in the future.

Click here to read the full article.

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