- Annual grocery bills could jump by £275 as inflation continues to accelerate
- Just under two thirds of households say they are concerned about the cost of their food shop
- With summer temperatures rising, sales of iced coffee and kombucha drinks have soared
- Lidl reached a record high market share this period at 8.3 per cent, gaining 0.5 percentage points
British grocery price inflation rose to 5.2 per cent for the four weeks to July 13, its highest level since January last year, according to data on Tuesday from market researcher Kantar, which has now changed its name to Worldpanel by Numerator.
With the average household spending £5,283 each year at the grocers, this latest rise could add £275 to bills if people’s shopping habits stay the same.
“Just under two thirds of households say they are very concerned about the cost of their grocery shopping, and people are adapting their habits to avoid the full impact of price rises,” Fraser McKevitt, head of retail and consumer insight at Worldpanel, commented.
“Own label products, which are often cheaper, continue to be some of the big winners and, in fact, sales of these ranges are again outpacing brands, growing by 5.6 per cent versus 4.9 per cent. These inflationary worries aren’t just changing what we buy, but how we prepare it too. We often see people choosing to make simpler meals when they are trying to save money, and today, almost seven in ten dinner plates include fewer than six components.”
Meanwhile, take home sales at the grocers grew by 5.4 per cent in the four weeks to 13 July compared with last year, and by 4.6 per cent in the 12-week period. Symbols and independents outpaced the total market during the 12-week period, with 7.3 per cent rise in sales, behind Ocado (11.7 per cent) and Lidl (11.1 per cent).
Meeting shoppers’ needs
With budgets under pressure, supermarkets have been finding new ways to pique the interest of consumers, McKevitt noted.
“Innovation is absolutely vital to help grocers keep up with new trends and make sure they’re meeting shoppers’ needs as behaviours and priorities shift. The drinks aisle in particular seems to be offering up plenty of inspiration. Iced coffee has soared in popularity in recent years and with summer temperatures rising, sales were up this month by 81 per cent. Kombucha drinks have also burst onto the scene, with sales more than doubling over the latest four weeks compared with 2024. No and low alcohol drinks continue their gradual march into the mainstream too with nearly seven in every 100 households buying a product this month, pushing sales up by 21 per cent,” he said.
Amid the summer sunshine, there was plenty of room for more traditional seasonal staples alongside new favourites. With consumers looking to cool off, sales of ice cream and sorbet soared by 33 per cent. Shoppers also enjoyed a glass or two of champagne or sparkling wine as sales grew by 9 per cent.
“And while not everyone is putting strawberries and cream in sandwiches just yet, Wimbledon did help get them back on shoppers' minds, with sales shooting up by 28 per cent and 16 per cent respectively,” McKevitt added.
Lidl share at record high
Lidl reached a record high market share during the 12-week period at 8.3 per cent, gaining 0.5 percentage points as it attracted more than half a million new customers to its stores. Tesco also boosted its share to 28.3 per cent as sales grew by 7.1 per cent, the fastest rate since December 2023. Sales at Sainsbury’s increased by 5.3 per cent, putting its market share at 15.1 per cent.
Matching its previous share high of 2.0 per cent, Ocado was again the fastest growing British grocer. Its sales rose by 11.7 per cent, exceeding the overall online market growth rate of 5.7 per cent. Over the past 12 weeks, online has accounted for 12.0 per cent of all sales at the grocers with 23 per cent of households making at least one virtual shopping trip.
Meanwhile, on the high street, grocery sales at M&S were 6.5 per cent higher than a year ago. Spending through the tills at Morrisons nudged up by 1.0 per cent and it now holds 8.4 per cent of the market, while Britain’s fourth largest grocer Aldi increased by 6.3 per cent, bringing its share to 10.9 per cent.
Asda’s portion of the market now stands at 11.8 per cent, after sales declined 3 per cent. Convenience specialist Co-op was the other retailer who saw sales declining, with 3.7 per cent drop taking its market share to 5.2 per cent.
Sales at Waitrose were 5.5 per cent higher over the 12-week period, giving the retailer a share of 4.4 per cent. Frozen expert Iceland holds 2.2 per cent of British grocery spending.