By Katrina Bishop, thought leadership activation manager at NIQ
This Christmas kicked off, as it always does, with the flurry of Black Friday deals, as brands and retailers competed to make their offers the go-to choice for festive stocking fillers. This Christmas began, as always, with a flurry of Black Friday deals as brands and retailers competed for shoppers’ attention. UK shoppers spent an estimated £6.4 billion, kicking off the festive season earlier than ever.
However, while retailers double down on deals earlier each year, NIQ’s latest Christmas Tracker data shows promotions are lifting value sales but failing to drive meaningful volume growth, which shows some disconnect between promotional intensity and genuine consumer demand. Brand trust, far harder to rebuild, is being put at risk by the current race to discount.
At first glance, the last quarter of the year remains commercially critical, accounting for 26.6% of total FMCG value sales. Yet despite Christmas spending starting earlier, the first four weeks of the festive period delivered just +2.5% value growth year-on-year. Dig a little deeper and the picture becomes more concerning. Units declined week-on-week, signalling that this growth is inflation-led rather than driven by true demand.
Put simply, early Christmas does not equal stronger Christmas.
There’s no avoiding the discounts, but are they impactful?
Discounts continue to dominate the retail playbook. NIQ data shows that over 30% of branded FMCG value is now sold on promotion, with intensity mirroring last year and set to peak throughout December. But the returns are diminishing.
Branded unit sales declined across the early festive period, while own label outperformed significantly delivering +5.0% value growth versus +0.4% for brands. When promotions become constant, they lose their power. Shoppers learn to wait, perceived value erodes and full price increasingly feels fake.
Even beyond FMCG, heritage retailers built on trust and value, such as John Lewis, illustrate how delicate the balance can be, particularly where early promotional activity may not immediately align with long-standing brand positioning.
Rather than building strength, excessive discounting risks reducing brands to commodities. Retailers should refocus on value, not just price, by emphasising quality, service and differentiation, ensuring promotional timing and tone stay tightly aligned with their core brand values, especially for heritage brands built on trust.
Cost pressure raises the stakes on trust
Brand trust matters even more in the context of the cost-of-living crisis we’re facing. Nearly one in four UK households expect to be severely impacted this Christmas. Price sensitivity is undeniable but it is not the only driver of choice. Trust, quality and reliability remain key factors influencing where shoppers spend.
Poorly timed or overly aggressive promotions do little to reassure customers. Instead, they can signal uncertainty and hastiness. In a season where confidence matters, retailers should resist the instinct to over-discount, as it can undermine credibility rather than strengthen it. Value needs to feel real, not manufactured if it’s to genuinely resonate and entice shoppers.
More shopping trips, less commitment
Shopper behaviour reinforces this challenge. NIQ data shows that consumers are shopping more often with occasions per buyer up +3.0%. However, units per trip are down as well as the value per occasion.
Promotions may be driving traffic but they are not driving attachment or bigger baskets. Without a compelling brand narrative, deals blur into one another. Shoppers move between brands with ease, responding to price cues rather than loyalty or differentiation.
Retailers such as Tesco with their successful Clubcard show that value does not need to mean perpetual discounting, when promotions are clearly structured around loyalty and long-term customer relationships.
And in this environment, frequency alone is not growth.
Economising without compromising
Interestingly, the strongest festive performance this year is coming from own label, particularly premium ranges. Shoppers are clearly willing to spend but selectively. They are economising where they can, without compromising on products that feel worth the money.
This success is not just about being cheaper. It reflects clarity of proposition, consistent quality cues and believable value. Premium own label shows that shoppers respond to confidence and coherence, not just price cuts.
For branded suppliers, this should act as a warning and a lesson.
Promotions must support, not substitute, brand equity
This Christmas, the risk is that short-term promotional activity replaces brand strategy, rather than reinforcing it. Of course, promotions are going to be more prominent during the festive period. The retailers that use them well will be rewarded with loyalty, signal quality and reinforce positioning. Used indiscriminately, they train shoppers to distrust full price and disengage from the brand altogether.
There is a clear challenge for retailers and brands heading into Christmas: short-term volume alone is not enough. As Christmas discounting escalates, those that align promotional strategy with brand equity, balancing value with credibility, will be best placed to win not just in December, but long after the decorations come down.
