Consumer pain increases as grocery inflation hits record high

No comments

Grocery price inflation reached a new high in March, with consumers now facing an £837 increase in their annual bills.

Consumers now face an £837 increase in their annual food bill

Food inflation hit 17.5% over the four weeks to March 19, according to the latest Kantar market data. This represented the ninth month straight of double-digit grocery price inflation.

“Unfortunately, it’s more bad news for the British public,” says head of retail and consumer insight at Kantar Fraser McKevitt.

“However, shoppers are taking action and clearly hunting around for the best value. Footfall was up in every single grocer this month, with households going to the shops just over four times per week in March. Apart from Christmas, that’s the highest frequency we’ve seen since the start of the pandemic.

“The supermarkets are also tackling grocery price inflation, battling it out to demonstrate value and get customers through their doors. This is a fiercely competitive sector and if people don’t like the prices in one store they will go elsewhere, with consumers visiting three or more of the top 10 retailers in any given month on average.”

McKevitt said that store loyalty cards had emerged as an “important way to provide value” and that shoppers were also continuing to purchase more own-label brands in a bid to keep costs down.

“Shoppers are also bringing the cost of their groceries down by picking up more own-label lines and sales were up again by 15.8% during the latest four weeks compared with last year.

“However, people are keeping some space in their baskets for the brands they know and love. Outside the discounters Aldi and Lidl, branded goods still make up 52% of the market and sales grew by 7.2% over the past month, the fastest rate we’ve seen since February 2021.

“Many brands are innovating and bringing new products to the shelves to maintain their popularity, and 10% of their sales in the last year came from new or updated items.”

Kantar found that fresh fruit and vegetable availability was high on the agenda at the end of last month, but shoppers didn’t generally go without.

“Despite concerns about shortages, the number of baskets containing tomatoes, cucumbers or peppers in the 10 major grocers stayed at 17% in March, the same as February,” said McKevitt.

“For any shoppers who couldn’t get what they wanted in larger supermarkets, the independents stepped in, with the volumes of tomatoes, peppers and cucumbers in baskets rising by 32%, 26% and 21% respectively in these stores.”

Lidl and Aldi continue to stride ahead

Lidl was the fastest-growing supermarket during the period, with sales growing by 25.8%, achieving market share of 7.4%.

Aldi secured a new record market share over the month, at 9.9%, driven by a 25.4% increase in sales.

Morrisons, meanwhile, saw a welcome return to growth with sales increasing by 0.1%, giving it an 8.8% market share. Waitrose also achieved a positive growth period, despite the ongoing cost-of-living crisis, with sales up 2.1% – its fastest rate of growth since September 2021.

Asda sales increased 7.3%, ahead of both Tesco and Sainsbury’s at 6.9% each.

Tesco remains the largest UK supermarket, with a 26.9% share of the market. Sainsbury’s share is 14.8%, while Asda’s is 14.3%.

Frozen specialist Iceland performed strongly, increasing its market share to 2.3%, up 0.1 percentage point as sales rose by 9.6%.

Convenience retailer Co-op now has a 5.7% share and Ocado’s market share remained at 1.8%.