Grocery inflation reached 17.1 percent this month, adding to households’ financial woes.
According to Kantar market research, prices are increasing fastest in certain markets like milk, eggs, and margarine. According to Kantar, the increase in food prices in the four weeks leading up to February 19 could add PS811 to an annual shopping bill.
Kantar’s head of retail and consumer insights, Fraser McKevitt, stated that this February marks the full year since the monthly grocery inflation rose above 4%. This is having a huge impact on people’s daily lives.”
According to him, its research revealed that grocery inflation was second in importance to the public after energy costs. Two thirds of respondents were concerned about food and drink prices above those related to strikes and climate change.
“One quarter of people say they are struggling financially, compared to one in five last year.” McKevitt stated that the numbers speak for themselves.
Consumer price inflation has been declining, falling from a peak at 11.1 percent in October to 10.1% in January. However, household incomes are being squeezed by higher food prices as well as cuts in government support for energy bills and rising mortgage rates.
Kantar reported that own-label sales rose by 13.2 percent in February. This was well ahead of the 4.6% growth in branded products. Kantar reported that grocery sales in the UK increased by 8.1% over the 12 week period ending February 19. This was despite a decrease in volume when inflation is taken into account.
The data was released as supermarkets are facing shortages in fruit and vegetables. Kantar stated that the shortage was due to supply chain issues was not captured in its most recent data, but that it would closely monitor the impact on sales over the next weeks.
McKevitt stated that while 43% of grocery baskets include at least one fresh produce item (pack limits), it is unlikely that pack limits will adversely affect consumers since we tend to buy fruits and vegetables in smaller quantities. Only 1% of tomato purchases in the last year included more than three boxes.
Valentine’s Day helped boost sales. Valentine’s Day saw steak sales rise by 25% in seven days, sparkling wine sales increased by two-thirds and consumers spent PS5 million more on chocolates. The sales of cold treatments rose by 82% last month. Cough liquids were up 78% and cough lozenges 70% respectively.
Aldi (German-owned discounters) and Lidl were the fastest growing grocers again, thanks to new store openings. Sales grew by 26.7 percent and 25.4 percent, respectively. Aldi’s market share grew to 9.4% and Lidl’s to 7.1%.
Tesco sales rose 6.6%, while Sainsbury’s was up 6.2% and Asda 5.9%, making it the market leader at 27.3 percent. Morrisons reported a 0.9 percent drop in sales.