Grocery inflation has hit a 13-year high in the month of June, with food bills on course to increase by an average of £380 a year for customers.

Grocery basket

The latest grocery market share data from Kantar showed that take-home grocery sales fell 1.9% in the 12 weeks to June 12, 2022, the strongest performance since October 2021. 

Over the last four weeks, sales grew 0.4% compared with the same period in 2021. 

Despite the positive performance for grocers, the concern remains surging inflation. Grocery prices rose 8.3% in the last month – the highest food inflation figure since April 2009. 

Kantar head of retail and consumer insight Fraser McKevitt said: “The sector hasn’t been in growth since April 2021 as it measures up against the record sales seen during the pandemic. However, these latest numbers show the market is to an extent returning to pre-Covid norms as we begin comparisons with post-lockdown times.

“The inflation number makes for difficult reading, and shoppers will be watching budgets closely as the cost-of-living crisis takes its toll. Based on our latest data, the average annual grocery bill is on course to rise by £380. This is over £100 more than the number we reported in April this year, showing just how sharp price increases have been recently and the impact inflation is having on the sector.”

As was mentioned by Tesco boss Ken Murphy at its first-quarter update last week, Kantar found that in the last month customers have been responding to surging prices by trading down from branded items to own-brand products. 

“Sales of these lines, which are often cheaper, have risen by 2.9%, boosted by Aldi and Lidl’s strong performances, both of whom have extensive own-label repertoires,” said McKevitt. “We can also see consumers turning to value ranges, such as Asda Smart Price, Co-op Honest Value and Sainsbury’s Imperfectly Tasty, to save money and together all value own-label lines grew by 12%.”

Online grocery sales fell to 12%, its lowest point since May 2020, and the 12th consecutive month where ecommerce sales densities fell. Conversely, footfall to supermarkets and c-stores rose 3.4%. 

Even with surging grocery inflation, sales over the platinum jubilee long weekend were £87m higher than an average weekend in 2022.

Lidl fastest-growing supermarket again

Lidl was once again the fastest-growing grocer this period, pushing its sales up by 9.5% over the 12 weeks to reach a 6.9% market share. Sales at Aldi rose by 7.9%, moving its share up versus last year by 0.8 percentage points to 9%.

None of the big four grocers grew sales, but Tesco out-performed the total market to nudge its share up to 27.3%. Sainsbury’s now holds 14.9% of the market, while Asda has 13.7% and Morrisons 9.6%.

Online retailer Ocado also did better than the wider market trend. The grocer’s sales fell by 2.3%, but it was able to retain its 1.8% slice of the market.

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