Comment: Christmas clarified the issues facing grocers

The polarised nature of retail’s Christmas sales performance is the story of the 2013 festive season. And nowhere is that more apparent than in grocery.

The ongoing economic headwinds have continued to take their toll on all four of the country’s largest grocers. Yet Aldi, Lidl, Waitrose and Booths have thrived in this environment, evidence of the huge structural changes taking place in the sector that some are better placed to leverage than others.

Many of the trends that shaped grocery retail in 2013 and played such a big role in the fortunes of individual retailers in the year accelerated over Christmas.

The discounters came of age with a marketing, product and brand strategy that will cause their larger rivals continuing pain as 2014 unfolds.

Christmas was a great test too for the increasing maturity of grocery’s online and convenience offers, and both were boosted by new levels of uptake by consumers confident that these channels could replace or augment the traditional Christmas food shop.

But the volume of Christmas trading data also highlighted the shopping habits that are shaping post-recessionary consumer behaviour, in particular those of the polarised or hybrid customer - the individuals just as at home shopping in Aldi as they are in the aisles of Waitrose.

IGD reported that 50% of shoppers said they visited Aldi or Lidl in December. Certainly, that’s a statistic boosted by a now embedded frugality. But the success at the other end of the market shows that shoppers are happy to engage with different retailers for different occasions and even for different products for the same occasion.

In such fluid conditions, loyalty has become a prized commodity in increasingly short supply, a problem that is most prevalent in the middle market where it is inevitably harder to differentiate oneself.

That said, the ability of Sainsbury’s, which has arguably the clearest brand proposition of its rivals, to hold share and the successes of Aldi and Waitrose show that spend can be won and, importantly, retained. But shoppers need a stronger reason than ever to make that choice.

Few would argue with Sainsbury’s boss Justin King when he described the last few weeks of the year as the toughest in his 30 years of food retailing. But Christmas also brought a new level of clarity about the forces that dictate consumer choices and the services, products and experience these more demanding times require.