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Alcohol and kids meals boost supermarket sales in lockdown January

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Higher than normal sales of alcohol and kids snacks helped boost supermarket sales in January as Britain coped with another lockdown and home-schooling.

Take-home grocery sales rose 12.2% to £29.25bn during the 12 weeks to January 24, according to data from Kantar, which was an acceleration on the growth seen in the Christmas period.

Ocado Group PLC’s (LON:OCDO) joint venture with Marks and Spencer Group PLC (LON:MKS) was again the best performing of the listed grocery businesses, with 12-week sales up 36.6% to £397mln.

Wm Morrisons Supermarkets PLC (LON:MRW) did best of the Big Four grocers, with sales jumping 14.3% to almost £3bn; followed by Tesco PLC (LON:TSCO), up 12.2% to just under £8bn; and J Sainsbury PLC (LON:SBRY) rising 12% to £4.6bn for the three-month period, all faster than the growth reported a month ago.

Although some adults were pursuing the tradition of a dry January, helping sales of no-alcohol beer bubble up 12%, many more seemed to be treating themselves to a stiff drink or two during the country’s third lockdown, with alcohol sales growing £234mln or 29% year-on-year.

With many families home-schooling during the current lockdown, Kantar said the average family spent £50 more on groceries in the month of January than they did last year.

This included stocking up on quick, child-friendly lunch options like fresh pasta, chocolate spread and peanut butter which all saw demand increase among family groups by 22%, 42% and 39% respectively.

“We expect to see strong growth for all the grocers fall off as we reach the anniversary of the first national lockdown in March,” said Fraser McKevitt, Kantar’s head of retail and consumer insight. 

“Sales will then be measured against the high volumes recorded in spring and summer 2020.”

With the UK’s vaccine rollout underway, he also expressed the widespread hope that pubs, restaurants and other parts of the hospitality sector will re-open soon, though for supermarkets this will mean demand for take-home groceries is likely to subside.

He noted that there has not yet been any Brexit effect on prices, with grocery inflation remaining steady at 1.3% for the past month.

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