Grocery inflation hits new peak as shoppers navigate £533 annual increase: Kantar

Grocery price inflation has hit its highest level since 2008, reaching 11.6 percent over the past four weeks, states Kantar today (16) in a report, highlighting that the average household’s annual grocery bill is now set to soar by £533, the equivalent to £10.25 every week.

In an effort to manage rising prices, people are increasingly turning to own-label value products with sales increasing by 19.7 percent this month. The long spell of hot weather has led to a boost of 23 percent for mineral water and an 18 percent jump in ice cream sales. Symbols and Independents saw their sales drop by 4.8 percent, most drop as compared to others except Waitrose.

Fraser McKevitt, head of retail and consumer insight at Kantar, comments, “As predicted, we’ve now hit a new peak in grocery price inflation, with products like butter, milk and poultry in particular seeing some of the biggest jumps. This rise means that the average annual shop is set to increase by a staggering £533, or £10.25 every week, if consumers buy the same products as they did last year.
 
“It’s not surprising that we’re seeing shoppers make lifestyle changes to deal with the extra demands on their household budgets. Own-label ranges are at record levels of popularity, with sales rising by 7.3 percent and holding 51.6 percent of the market compared with branded products, the biggest share we’ve ever recorded.” 

With inflation high and a potential recession later this year, comparisons against the last financial crisis are becoming visible.

“People are shopping around between the retailers to find the best value products, but back in 2008 there was much more of a reliance on promotions. It’s harder to hunt out these deals in 2022 – the number of products sold on promotion is at 24.7 percent for the four weeks to 7 August 2022, while 14 years ago it was at 30 percent. Instead, supermarkets are currently pointing shoppers towards their everyday low prices, value-ranges and price matches instead,” Fraser McKevitt says.
 
“Over the past month we’ve really seen retailers expand and advertise their own value ranges across the store to reflect demand. Consumers are welcoming the different choices and options being made available to them on the shelves, with sales of own-label value products increasing by 19.7 percent this month. As an example, ASDA’s Just Essentials line, which launched this summer, is already in 33 percent of its customers’ baskets.” 

Annual footfall has continued to pick up in store while online shopping declines. Fraser McKevitt says: “Shoppers have made the most trips into store since March 2020. This is understandably impacting the online grocery market, and its total share has dropped to 11.8 percent. This is the first time online’s share has dipped below 12 percent since the early days of the pandemic in May 2020. Even so, 19 percent of the UK population still made an online order during the past four weeks, the equivalent to 5.4 million households.”
 
Over the last month, the sun has shone in the wake of the England women’s Euros victory, and the record temperatures have had an impact on consumers’ baskets. Fraser McKevitt continues: “As the mercury climbs, shoppers have turned to mineral water and soft drinks to cool off. Sales of both products are up by 23 percent and 10 percent respectively in the latest four weeks. Unsurprisingly, ice creams are also popular with 18 percent year on year growth, up by 4 percentage points on the previous month.

“Adapting to the changing temperatures, we’re expanding our summer wardrobes too, now that there are no restrictions on travel or going outside. Sales of clothes intended for summer holidays like shorts, sundresses, caps and swimming costumes, have increased by 163 percent.”