The volume share of the Christmas gift market held by supermarkets is predicted to increase from 19% in 2008 to a record 25% this year, although the amount each adult spends on gifts is expected to fall from £205 last year to £188.
"Grocers in general, and Asda and Tesco in particular, are well positioned to increase their share of Christmas gifting," said Alex Seron, consumer insight director of TNS Gift Trak, which produced the forecast. "They have been offering a wider range of products in non-food categories for some time, but there will be a stronger emphasis on their gift offer in the build-up to Christmas as they try to steal more sales from the high street. The latter will suffer from the disappearance of Woolworths and shoppers will flock to supermarkets to get the best deals."
Supermarkets were also expected to increase their share of the value market, said Seron. Last year the multiples had a 10% share of the value market, but this year it is predicted to rise to 15% as supermarkets expand their range of toys, video games, cosmetics and clothing, but reduce ranges of lower-value CDs and confectionery. However, he warned: "The public is still very pessimistic about the present situation, which leads us to believe that overall consumer spend on gifts will continue to deteriorate."
The news comes as Sainsbury's locked horns with Tesco and Asda this week by knocking 50% off its toys in a seven-day promotion. The retailer expects to sell £3m worth of toys and claimed the offer would save shoppers £12m. Tesco and Asda launched similar deals last week, investing £10m and £6m in the cuts respectively.
Meanwhile, Tesco is opening 258 Extra, Superstore and Homeplus branches on Boxing Day compared with 189 last year. All Express branches will also open.