Seven out of 10 households under fear of cost-of-living crisis: NielsenIQ

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Some 72 per cent of UK households fear they will be severely or moderately affected by the cost-of-living crisis in the first part of 2023, up from 54 per cent at the end of last year, survey data from market researcher NielsenIQ showed on Tuesday (7).

After a tough 2022, British consumers are facing an even tighter squeeze on their finances this year. Inflation is running at 10.5 per cent, mortgage rates are rising and the government is cutting back support on household energy bills.

NielsenIQ said UK grocery sales on a value basis rose 7.6 per cent in the four weeks to Jan. 28, due to an increase in food price inflation to 13.8 per cent.

However, volume sales fell 6.9 per cent – the lowest volume growth recorded in over nine months, which reflects the concern shoppers have about cost-of-living increases, it said.

“We expect a challenging first quarter for the grocery industry, with inflation very much top of mind for shoppers,” Mike Watkins, NielsenIQ’s UK head of retailer and business insight, said.

“As a result, shoppers will continue to trade down to cheaper brands or private label products.”

Echoing data from rival market researcher Kantar last week, NielsenIQ said German-owned discounters Aldi and Lidl continued to show strong momentum with sales growth of 21.9 per cent and 17.3 per cent respectively over the 12 weeks to Jan. 28.

It said Lidl overtook Morrisons to become the UK’s fifth largest grocer with a market share of 8.9 per cent. Sales at market leader Tesco rose 8.1 per cent. They were up 8.3 per cent at Sainsbury’s and up 7.4 per cent at Asda but down 0.5 per cent at Morrisons.

NielsenIQ said online’s share of all FMCG (fast-moving consumer goods) sales was 11.1 per cent – similar to its share in the latter part of 2022.

Separately on Tuesday, surveys from the British Retail Consortium and Barclays showed spending at British retailers slowed in January but the overall picture looked a bit brighter as consumers treated themselves to cinema trips and booked holidays.