Retailer’s Christmas results: learnings for 2026

The start of January has brought a wave of Christmas trading announcements from UK grocery retailers. Alongside sales tracking data, a clear picture of how the market performed during the festive period has emerged.

While headline figures suggest another record Christmas for UK grocery, the underlying drivers tell a more familiar story.

A record Christmas, driven by inflation rather than volume

Although market growth was reported as 3.8% by Worldpanel by Numerator for the 12 weeks to 28 December, representing a record £13.8 billion in grocery sales, volume growth was minimal. With the ONS reporting food and non-alcoholic drinks inflation at 4.2% in November, inflation was likely to have been the primary driver of market growth over Christmas.

Christmas trading: announced retailer results

The announced results saw retailers and channels perform broadly in line with trends seen throughout 2025.

Ocado and M&S Food

Ocado’s Christmas performance was reported within M&S’s Christmas trading update, covering the 13 weeks to 27 December.

Ocado delivered sales growth of 13.7%, driven by volume growth of 10.7% and an 11.0% increase in orders. Sales of M&S products increased by 16.3% during the period and now account for 30% of Ocado’s total sales.

M&S Food reported total sales growth of 6.6% over the same 13-week period, with like-for-like sales up 5.6% and volumes increasing by 2.3%. The retailer highlighted improved operational execution, particularly around the sell-through of “hero” lines, which supported higher sales while reducing markdowns and waste.

M&S also pointed to strong growth in its value-led ranges. Sales of ‘Remarksable Value’ and ‘Bigger Pack, Better Value’ increased by 20% following range expansion for the festive period.

Lidl and Aldi

Lidl reported sales growth of 10.0% for the four weeks to 24 December, taking sales beyond £1.1 billion. Growth was driven by an 8% increase in shopper numbers, reaching almost 51 million. Lidl highlighted triple-digit growth in its Deluxe party food range, alongside strong demand for its Lupilu wooden toy range, where sales increased by almost 25%.

Loyalty engagement was also a key contributor. Lidl reported a 28% increase in active Lidl Plus users in November, while its Lidl Plus Advent Calendar campaign delivered a 400% increase in redemptions, generating millions of daily engagements in the run-up to Christmas Day.

Aldi reported sales growth of 3.0% to £1.7 billion over the four weeks to 24 December. Shoppers spent £500 million at Aldi in the week before Christmas Day, up 5% year-on-year.

Sales of Aldi’s premium ‘Specially Selected’ range increased by more than 12% over the festive period. The retailer highlighted products such as The Ultimate Wagyu Fat Roast Potatoes, Double Wrapped Pigs in Blankets and White Chocolate Ganache Pinecones as standout performers.

Tesco and Sainsbury’s

Tesco reported Christmas trading for the six weeks to 3 January, with like-for-like sales growing 3.2%. Fresh food was a particular area of strength, with like-for-like sales up 6.6%. Sales of Tesco Finest increased by 13.0%, with party food growing by 22%.

Online was another standout, with sales increasing by 11.2%. Tesco credited extended Christmas Eve delivery hours, an additional 100,000 delivery slots in the final week before Christmas, and the use of AI-powered scheduling tools. Its Whoosh rapid delivery service also performed strongly, adding 250,000 new shoppers and growing sales by 47%.

Sainsbury’s also reported on the six weeks to 3 January. Total group sales increased by 3.3%, driven by grocery growth of 5.1%. Performance was offset by declines in clothing and general merchandise, down 1.0%, due to mild weather, and a 2.2% decline in Argos sales. Sainsbury’s cited weak consumer confidence as a factor; despite Argos volumes increasing versus Christmas 2024, the average price paid was lower.

Within grocery, Sainsbury’s reported fresh sales growth of 8%, with Taste the Difference fresh sales up 15%. Online grocery sales grew by 14%, with the retailer highlighting a significant contribution from quick commerce.

The rest of the market: insights from sales tracking data

Data from Worldpanel by Numerator for retailers that did not publish Christmas trading updates suggests market dynamics remained consistent with those seen across 2025.

Waitrose, Iceland, and Morrisons all delivered sales growth over the festive period. Waitrose and Iceland, in particular, finished 2025 with greater momentum than they showed at the start of the year.

Morrisons also appears to have exited the year with an improving sales performance. This is notable given that its Christmas 2024 trading was impacted by IT disruption following a cyberattack on logistics partner Blue Yonder in November 2024.

In contrast, Co-op and Asda are both expected to have seen sales decline compared with Christmas 2024. Asda, which was still recovering from IT challenges linked to its systems migration in its third quarter, is expected to have seen a sharper decline than Co-op.

What Christmas 2025 signals for the year ahead

Taking stock of Christmas 2025, several themes point to how competition in the grocery market is likely to develop through 2026:

1. The continued strength of premium private label is likely to see further investment in 2026. With Tesco, Sainsbury’s, Morrisons and Asda all now offering premium-plus private label tiers, seasonal events are increasingly becoming battlegrounds for own-label innovation. This will continue to pressure brands and increasingly blur boundaries with the away-from-home market.

2. Intense competition on price shows little sign of easing. Retailers’ efforts to offer the cheapest family Christmas meal, often supported by loss-leading pricing on seasonal vegetables, point to continued price investment. This is already evident in Morrisons’ latest price cuts, Tesco’s expansion of Everyday Low Prices, and Asda’s commitment to undercut competitors’ loyalty pricing through Asda Price.

3. Stronger performances from Waitrose and Iceland indicate competition for shoppers at the premium and value ends of the market will intensify.

 

Looking for more insight?

Subscribers can access our UK country hub.