Consumers shop around as grocery price inflation rises to record 17.5 per cent

Grocery price inflation has climbed again to reach 17.5 per cent over the four weeks to 19 March 2023, a new record based on Kantar’s data.

The market researcher said households are now facing an £837 increase in their annual bills if they don’t change their shopping behaviours.  Take-home grocery sales more widely grew by 8.6 per cent over the 12-week period.

“Unfortunately, it’s more bad news for the British public, who are experiencing the ninth month of double-digit grocery price inflation,” Fraser McKevitt, head of retail and consumer insight at Kantar, commented.

“However, shoppers are taking action and clearly hunting around for the best value. Footfall was up in every single grocer this month, with households going to the shops just over four times per week in March.  Apart from Christmas, that’s the highest frequency we’ve seen since the start of the pandemic.”

McKevitt added that the stores are battling to demonstrate value and get customers through their doors.

“This is a fiercely competitive sector and if people don’t like the prices in one store they will go elsewhere, with consumers visiting three or more of the top 10 retailers in any given month on average,” he said.

The majority of retailers have used loyalty card schemes as a tactic to attract and retain shoppers, and the lure of own label is still strong, McKevitt explained.

“Store cards have emerged as an important way to provide value amid the high cost of living with the grocers offering cheaper prices, coupons and points for people who scan them at the till.  Our latest data shows that more than nine in 10 of us have at least one loyalty card in our wallets and usage is on the rise,” he said.

“Shoppers are also bringing the cost of their groceries down by picking up more own label lines and sales were up again by 15.8 per cent during the latest four weeks compared with last year. However, people are keeping some space in their baskets for the brands they know and love. Outside the discounters Aldi and Lidl, branded goods still make up 52 per cent of the market and sales grew by 7.2 per cent over the past month, the fastest rate we’ve seen since February 2021.  Many brands are innovating and bringing new products to the shelves to maintain their popularity, and 10 per cent of their sales in the last year came from new or updated items.”

The availability of fresh fruit and vegetables was high on the agenda at the end of last month, but Kantar’s latest data shows that shoppers didn’t generally go without.

“Despite concerns about shortages, the number of baskets containing tomatoes, cucumbers or peppers in the 10 major grocers stayed at 17 per cent in March, the same as February,” McKevitt said.

“For any shoppers who couldn’t get what they wanted in larger supermarkets, the independents stepped in, with the volumes of tomatoes, peppers and cucumbers in baskets rising by 32 per cent, 26 per cent and 21 per cent respectively in these stores.”

Shoppers have begun looking ahead to Easter as Spring officially arrived in March, as chocolate egg sales are already up six per cent in volume terms on last year.  The ever-popular hot cross bun is also making its way into shoppers’ baskets again, with sales up by five per cent.