TOP NEWS: UK grocery price inflation sets new record high of 12% – Morningstar

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(Alliance News) – UK grocery price inflation has hit a record pace, prompting customers to switch to low-cost supermarkets and own-label ranges, according to survey figures from data analytics firm Kantar.
Grocery price inflation reached over 12% over the past four weeks ending September 4, with the average household’s annual grocery bill now set to soar to GBP5,181 – if consumers were to buy the same products as they did last year.
Prices were rising the fastest in goods such as milk, butter and dog food, which have jumped 31%, 25% and 29%, respectively.
“It seems there’s no end in sight to grocery inflation as the rate at which food and drink prices are increasing continues to accelerate,” said Fraser McKevitt, head of retail & consumer insight at Kantar.
In an effort to cope with rising prices, people are increasingly turning to own-label value products, with sales of these increasing by 33%. Own-label ranges now hold 51% of the market in the UK compared to branded products, Kantar said.
McKevitt explained: “In what is a fiercely competitive sector, supermarkets are reacting to make sure they’re seen to acknowledge the challenges consumers are facing and offer best value, in particular by expanding their own-label ranges.”
Yet, even with rising prices, parents have had to prepare for the end of the summer holidays as the majority of schools went back in early September.
“In the week before the schools reopened, to September 4, 2022, parents were clearly stocking up and getting ready for the return of the traditional packed lunch. Sales of sliced bread were up by 12% in comparison with the previous three weeks, while cheese snacks grew by 18% and children’s yoghurts by 57%,” McKevitt added.
Supermarket sales in the past 12 weeks rose by 3.8% year-on-year to GBP10.18 billion.
“Back at the start of the 2010s, Tesco, Sainsbury’s, Asda and Morrisons together accounted for over three quarters of the sector but that traditional big four is no more. The discounters have seen dramatic sales increases in recent months, bringing more and more customers through their doors,” McKevitt said.
Lidl remains the fastest growing grocer, for the fourth month in a row. Its sales were up 21% year-on-year over the 12 week period to September 5 at GBP2.12 billion, taking its share of the UK market up to 7.1% from 6.1%.
Low-budget peer Aldi also had a strong performance, with sales up 19% to GBP2.80 billion. Its market share rose from 8.1% to 9.3%, making it Britain’s fourth largest supermarket for the first time.
Grocer Asda saw growth in the period, with sales rising by 2.2% to GBP4.27 billion, though its market share still slipped to 14.1% from 14.4%.
Morrisons sales slipped 4.1% annually to GBP2.74 billion. Its market share fell to 9.1% from 9.8%.
Waitrose saw a similar trend, with sales falling by 4.7% year-on-year to GBP1.41. Its market share weakened to 4.7% from 5.1%.
Though Tesco PLC remained the largest supermarket with a 26.9% share of the grocery UK market and sales of GBP8.11 billion, up 1.9% year-on-year. Tesco’s market share dipped from 27.4% a year earlier, however.
The market share of J Sainsbury PLC fell to 14.6% from 15.0% a year before, but its sales increased by 1.5% to GBP4.42 billion.
Ocado Group PLC’s market share was unchanged at 1.7%, though sales rose 5.2% year-on-year to GBP515 million.
Kantar data is based on over 75,000 identical products compared year-on-year in the proportions purchased by British shoppers.
Shares in Ocado, which also reported results for Ocado Retail on Tuesday, were down 13% at 694.20 pence in London. Tesco shares were down 3.4% at 244.45p. Sainsbury’s shares were down 2.6% at 207.90p.
By Sophie Rose;
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