Aldi is raising prices at a quicker rate than its mainstream grocery rivals, according to findings from Retail Week’s new strategic report.

Data compiled in Grocery Inflation – Your strategy to tackle rising food pricesa collaboration between Retail Week and Price + Promo by Ascential, shows Aldi’s prices have increased at a steeper percentage than its market rivals over the past 12 months in areas including carbonates, crisps, eggs, poultry and pasta. 

 

However, the research found Aldi continues to set the price benchmark in the UK grocery market, despite the swathes of price investment being made by the likes of Tesco, Sainsbury’s and Asda.

On a pence-per-pack basis, Aldi’s prices rose faster than the market in just four of the 12 categories assessed. 

An Aldi spokesman said: “The analysis from Ascential demonstrates Aldi’s level of investment to shield our customers from inflation, with price increases in cash terms the lowest in the sector.

“Consumer group Which? recently confirmed Aldi as the UK’s cheapest supermarket on a basket of 47 everyday items with a price difference of £13.53 against Tesco, Asda, Morrisons and Sainsbury’s, making them on average 18% more expensive.”

Food retailers are currently battling a perfect storm of challenges as they grapple to keep a lid on rampant food price inflation.

The fallout from the war in Ukraine, the Covid-19 pandemic and Brexit have left businesses and consumers facing soaring energy costs, supply chain snarl-ups and shortages of goods and materials – all of which will combine to disrupt the UK economy throughout the golden quarter and much of 2023.

But retailers are doing all they can to minimise the impact on shoppers at a time when household bills are surging, and disposable income and consumer confidence are tumbling.

Grocery Inflation – Your strategy to tackle rising food prices tracks food prices across 12 staple categories between June 2020 and September 2022; analyses the strategies that the UK’s 12 leading grocery retailers are employing to tackle food price inflation; and assesses the implications for the UK grocery sector heading into 2023 and beyond.

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The report, which is available exclusively to Retail Week and Price + Promo subscribers, also reveals:  

  • Which staple grocery categories have seen the steepest price increases 
  • How retailers have fought hard to maintain bread and pasta prices, despite the growing cost of wheat
  • How grocers including the Co-op and Ocado need to sharpen their price focus
  • Which strategies food retailers should employ to achieve success as we emerge from the cost-of-living crisis

 

Lisa Byfield-Green, data and insights director at Retail Week, Luke Tugby, editor of Retail Week, and Sophie Bailey, managing director of Price + Promo, said: “We know from speaking to you on an almost daily basis that navigating this challenging environment – making difficult decisions around costs and price increases at the shelf-edge – is the biggest headache grocery retailers are facing right now. 

“Businesses are having to take tough calls every day that maintain relationships with key suppliers while keeping a keen eye on value propositions. Retailers are working relentlessly to make the right trade-offs and keep a lid on rampant food price inflation.

“In this report, our data and analysis cut out the noise, hysteria and alarmist headlines often heard in the mainstream media to paint a clear picture of food price inflation across key categories; explore which retailers are employing the best strategies and which categories are most impacted; and offer our blueprint for success in an ever-changing market.”

 

  • This report is available exclusively to subscribers – to download your copy, subscribe today
  • Want to understand more about retailer strategies? Book a demo of Retail Week Prospect, our insight and analysis platform covering the UK’s leading 120 retailers. Contact James Thorpe to arrange your demo.

Report methodology

Retail Week analysed category data from Ascential Price + Promo from June 2020 to September 2022 to understand retailers’ pricing strategies within 12 essential categories (butters and spreads, carbonates, crisps, dry pasta, eggs, fresh fruit, frozen fish, milk, poultry, ready-to-eat cereal, tinned fish and wrapped bakery) and to determine to what extent each of these has been impacted by inflation.

Our analysts compared minimum, average and maximum pricing data from the online platforms of nine grocers: Tesco, Sainsbury’s, Morrisons, Asda, Ocado, Co-op, Waitrose, Iceland and Aldi. Lidl could not be included since it does not have an ecommerce proposition.

Inflation calculations are based on like-for-like data, analysing pricing for products sold continually from September 2021 to September 2022.

Our category analysis insight (slides 33-43) includes range adjustment, reflecting price development as grocers have introduced new, entry-level (or premium) ranges.