Grocery sales have increased for the first time in more than a year – but experts have warned that “near record-breaking” food inflation will shift shopper behaviour in the coming months.
Supermarket sales inched up 0.1% in the 12 weeks to July 10, according to new data from Kantar – the first time the market has been in growth territory since April 2021.
Food price inflation hit 8.1% during the 12-week period and 9.9% during the four weeks to July 10. Prices rose quickest in dog food, butter and milk.
Kantar said prices have jumped another 1.6 percentage points since the start of July – the second-highest level of grocery inflation recorded since it started tracking prices back in 2008.
Annual grocery bills for the average household are now £454 higher, Kantar said.
The data company’s head of retail and consumer insight Fraser McKevitt said consumers were already “feeling the pinch” and adjusting their shopping habits, trading down from proprietary brands into grocery retailers’ own-label lines.
McKevitt said: “People are increasingly turning to own-label products to drive down the cost of their weekly shop. Supermarkets’ own lines grew by 4.1% in this period, while sales of branded items have fallen by 2.4%.
“It’s a complex picture, and the grocers are busy negotiating with their suppliers to mitigate impact at the tills as far as possible. We’ve seen this play out in the headlines in recent weeks, with some well-known brands temporarily disappearing from supermarket shelves over pricing disputes.”
Unsurprisingly, given the spike in food bills and the wider cost-of-living crunch sparked by surging energy and fuel prices, Lidl emerged as the fastest-growing supermarket during the 12 weeks to July 10. The discounter’s sales jumped 13.9%, ahead of great rival Aldi, which clocked up an 11.3% uplift.
Tesco was the only member of the big four to increase sales. The amount spent at Britain’s biggest grocer inched up 0.1% – the first time since October 2021 it has been in growth.
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