James Davey

LONDON, (Reuters) – British shoppers were anxious about Omicron coronavirus’ rapid spread. They may not have gone to bars or restaurants for Christmas this year, but they did spend a good deal at home and splashed out on Champagne, fine food and sportwear.

After a challenging 2020, which ended in tightening restrictions again, the British spent large in December 2021. Supermarkets, homeware retailers, and clothing stores reported better results than anticipated.

Simon Roberts (Sainsbury’s Chief Executive) told reporters that “customers wanted to trade-up” after Britain’s second-largest supermarket group improved its profit outlook for the full year.

This chain had its best ever champagne and sparkling wine sales, and its sales of “Taste the Difference”, a premium food range that offers gourmet foods and drinks was up 13% on a 2-year basis.

Roberts comments were in line with the British discounters Aldi & Lidl.

Aldi reported Monday that it had sold more than 5 million bottles prosecco, sparkling wine, and champagne in its Premium “Specially Chosen” line.

Lidl announced Tuesday that sparkling wine sales for December were up 24% over the previous year.

Kantar, a market researcher in this sector, estimated that 627mln pounds (855 million million dollars) were spent by supermarkets on their own upmarket products during the four week period ending Dec. 26, an increase of 6.8% over 2020.

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Roberts, Sainsbury’s spokesperson for the group, said that they had “planned big.”

He said that the main Christmas lines were bought in large volumes to show that customers wanted to enjoy Christmas big.

Sainsbury’s general merchandise division, including the Argos brand, suffered from a lack of toys and technology. Its profit margins were boosted by a greater focus on profitable sales.

Next fashion retailer also echoed the same theme last week.

Next reported that stock levels were significantly lower than anticipated in the lead up to Christmas. However, the strong underlying consumer demand allowed the company to surpass its expectations and increase its annual profit forecast.

Similar results were reported by JD Sportswear (NASDAQ:) Sports Fashion on Wednesday. The retailer raised its profit outlook after strong Christmas sales, even though some key suppliers experienced disruption in supply chains.

Dunelm is a homewares and furniture retailer. Record sales were achieved thanks to customers buying holiday items in stores, something they are not able to do online.

Even though the mood is positive, there are some worrying signs.

UK citizens are currently facing a major cost-of-living crisis. This is due to high inflation, rising energy bills, and tax hikes that could affect discretionary spending.

Kantar observed that December saw an 8% increase in sales for indigestion medications.

($1 = 0.7335 pounds)