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Discounters’ march continues even as grocery price inflation dips

Discounters’ march continues even as grocery price inflation dips

Grocery price inflation rose by 17.3 per cent in the four weeks to 16 April 2023, down marginally on the 17.5 per cent recorded in the previous four weeks, according to the latest data from Kantar.

Take home grocery sales grew by 8.1 per cent over the month to mid-April.


Amid rising prices, both Aldi and Lidl hit new record market shares over the latest 12 week period at 10.1 per cent and 7.6 per cent respectively. Lidl was the fastest growing grocer with sales increasing by 25.1 per cent, while Aldi is just behind on 25.0 per cent.

Fraser McKevitt, head of retail and consumer insight at Kantar, said it’s too early to call the peak on grocery price inflation despite the welcome drop.

“We’ve been here before when the rate fell at the end of 2022, only for it to rise again over the first quarter of this year. We think grocery inflation will come down soon, but that’s because we’ll start to measure it against the high rates seen last year,” McKevitt said.

“It’s important to remember, of course, that falling grocery inflation doesn’t mean lower prices, it just means prices aren’t increasing as quickly.”

McKevitt added that consumers are continuing to shop around, visiting at least three major retailers every month on average.

“The discounters have been big beneficiaries of this, with Aldi going past a 10 per cent market share for the first time this month. That’s up from 5 per cent eight years ago in 2015, so we can see just how competitive the market can be,” he said.

“Retailers are really battling it out to show value to shoppers, but if consumers feel their offer isn’t quite right then they’ll go elsewhere.”

After ten months of double-digit price growth, consumers are continuing to turn to own label lines to help manage spending, the data showed.

“Own label lines, which are often cheaper, are still growing at 13.5 per cent this period suggesting shoppers are finding better value for money on these shelves. The very cheapest value own label lines are doing even better, with sales soaring by 46 per cent versus a year ago,” McKevitt explained.

“These products now find their way into nearly one in five baskets. Branded sales are going up but more slowly at 4.4 per cent.”

Shoppers, however, embraced the Easter spirit this April despite ongoing pressure on their household budgets.

“It was a record-setting Easter, with a whopping 38 million chocolate eggs and treats bought in the week running up to Easter Sunday, five million more than last year,” McKevitt said.

“Households spent nearly £14 on Easter chocolate over the month, which works out at around six packs on average. People didn't hold back on other favourites either; the number of hot cross bun packs sold nudged up by 5 per cent while 3.4 million households picked up a lamb joint for the traditional seasonal roast during the four weeks.”

He predicts shoppers are likely to be looking ahead to the three bank holidays in May, including for the Coronation, which could impact grocery sales.

“We’ve recorded bumps in supermarket sales for previous major royal events. During the week of the Platinum Jubilee last year they were £87 million higher than the average in 2022. We’ll be keeping a close eye on the data in the weeks to come to see if we get the same effect this time around, including how many of us indulge in a Coronation Quiche,” McKevitt said.

“Only half of British households bought a quiche over the past year so it might not be for everyone.”

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