Home Business NewsBusiness UK grocery inflation hits 13-year high

UK grocery inflation hits 13-year high

by LLB Reporter
21st Jun 22 11:57 am

Supermarket inflation hit 8.3% in the past month, the highest rate in 13 years, according to latest figures from Kantar.

Over the latest four-weeks sales grew by 0.4% versus the same period in 2021. Despite the more positive figures, inflation remains a key challenge for the sector and like-for-like grocery prices rose by 8.3% over the past month, up 1.3 percentage points on May to reach their highest level since April 2009.

Fraser McKevitt, head of retail and consumer insight at Kantar, comments: “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.”

Analysis shows that consumers are taking steps to manage rising prices at the tills, as Fraser McKevitt continues: “Shoppers have swapped branded items, which have declined by 1.0%, for own-label 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. 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 12.0%.”

Store footfall jumped by 3.4% over the latest four weeks, while online fell to its lowest proportion of the market since May 2020 at 12.0%. Fraser McKevitt explains: “We’re still way ahead of our continental neighbours when it comes to buying groceries online and one in five British households makes an order each month, the highest proportion in Europe. But online sales have been suffering since the end of the pandemic. This is the twelfth month in a row they’ve been in decline and digital orders fell by almost 9% in June.

“As well as the return to pre-COVID habits, this drop could be the result of shoppers looking to cut costs by avoiding delivery charges. The sunnier weather may also be pushing up store footfall, as people decide it’s warm enough to walk or cycle to their local supermarket.”

Even with grocery inflation at a decade-long high, sales during the week of the Platinum Jubilee (to 5 June) were £87 million higher than on average in 2022. Fraser McKevitt continues: “Despite the rising cost of living, the British public got into the jubilee spirit in characteristic fashion. Alcohol sales were up by a third and purchases of ice cream increased by 35% over the week compared to the average in 2022. Many people tried their hand at the official Jubilee pudding, the lemon Swiss roll and amaretti trifle, and sales grew by 16% for lemon curd, 58% for fresh cream, 18% for Swiss rolls and 9% for custard.”

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