£10 fizz leads price charge

Asda was selling £10 bottles of Champagne this week as the supermarkets’ battle for hard-up consumers’ Christmas drinks budgets hotted up.

The chain was selling Pierre Darcys Brut NV for a tenner, down from £23.98, and also had Asda Extra Special Vintage Cava at half-price for £5. 

Other retailers were also focusing on fizz as a footfall driver, with Sainsbury’s selling Antoine de Clevecy Champagne at £12.99, down from £29.99, and half-price Etienne Dumont Brut NV Champagne at £15.99.

In all, Sainsbury’s had 31 promotions on Champagne and sparkling wines this week, as well as several half-price deals on wine and sherry.

Tesco had five Champagnes at half-price, with Charles de Ravon Brut NV the cheapest at £13.49.

Many of the Champagne and sparkling wine promotions are scheduled to stay in place until early January. The deals came as British Retail Consortium figures showed a six-month low in retail sales growth and a drop in retail price inflation.

Taken together, the indicators point to one of the toughest Christmases for sales and margins in living memory.

UK like-for-like retail sales fell 1.6% in November compared with the same month in 2010 – the weakest performance since May. 

Total sales were up just 0.7%, against a 2.8% increase recorded in November 2010 by the British Retail Consortium-KPMG Retail Sales Monitor.

Internet and mail-order sales are also struggling – growth fell back in November after picking up in October, with the increase of 8.6% the weakest since March.

BRC director general Stephen Robertson said: “There’s a worrying lack of cheer in these figures. The weakest increase in sales for six months suggests consumers are keeping a tight rein on their spending, despite Christmas being so near. 

“Consumers are not quite in the Christmas mindset yet, although stores are working to generate much-needed sales with high levels of festive discounting.”

Helen Dickinson, head of retail at KPMG, said: “Any sales are hard won, with high discount and promotion levels. Retailers’ performances are suffering because of weak top-line growth and declining margins, making the backdrop even more challenging. 

“December will require some tough decisions for a number of retailers as they struggle to plot a path in such challenging conditions.”

The BRC-Nielsen Shop Price Index for November showed increasing pressure on prices, with retail inflation at 2%, down from 2.1% in October.

Nielsen said the proportion of goods on promotion in supermarkets rose to 37%, from 35%, during November, with overall grocery multiple sales down from 2.7% to 2.2% in the four weeks to November 26.

Mike Watkins, senior manager for retail services at Nielsen, said discount retailers were set for their “best ever Christmas”, with Asda and Morrisons also well-positioned for December sales growth.

“The last week of November is typically a strong week for supermarkets, but this year the growth trend is different,” he added.

“Shoppers are generally not only delaying spend until December, they are also buying less.”

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