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Average annual UK food bill set to rise 454 pounds as inflation soars
Global Banking & Finance Review®
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By James Davey
LONDON (Reuters) – UK grocery inflation hit 9.9% in the four weeks to July 10, adding 454 pounds ($543.7) to Britons’ annual bills amid a worsening cost of living crisis, industry data showed on Tuesday.
Market researcher Kantar said the inflation rate was the second highest it has seen since it started tracking supermarket prices in this way in 2008.
“We’re likely to surpass the previous high come August,” warned Fraser McKevitt, Kantar’s head of retail and consumer insight.
The researcher said prices are rising fastest in markets such as dog food, butter and milk.
Food inflation could reach 15% this summer and 20% early next year according to some forecasts.
Kantar said sales on a value basis rose 0.1% at market leader Tesco over the 12 weeks to July 10, but fell at Sainsbury’s, Asda and Morrisons as shoppers switched to German-owned discounters Aldi and Lidl.
Lidl was Britain’s fastest growing grocer over the 12 weeks with sales up 13.9%, while Aldi’s were up 11.3%.
Both hit record market shares, with Lidl at 7.0% and Aldi at 9.1% – just 0.3% below Morrisons, Britain’s No. 4 grocer.
“Over 67% of people in Britain shopped in either an Aldi or a Lidl in the past 12 weeks, with 1.4 million additional households visiting at least one of the discounters in the latest three months compared with last year,” said McKevitt.
Kantar said as prices rise Britons are also increasingly turning to own-label products to drive down the cost of their weekly shop. Sales of supermarkets’ own lines grew 4.1% over the 12 weeks, while sales of branded items fell 2.4%.
Facing the toughest economic conditions in decades, Britain’s food retailers are monitoring each others’ prices more than ever before.
Kantar said its data also showed Britons preparing for the current heat wave, with sales of ice cream and suncare products soaring by 14% and 66% respectively over the past four weeks.
It said total UK supermarket sales rose 0.1% over the 12-week period – the first time the market has registered growth since April 2021.
UK grocers’ market share and sales growth (%)
Market share Market share % change in
12 wks to 12 wks to sales
July 10 2022 July 11 2021 (yr-on-yr)
Tesco 27.1 27.1 0.1
Sainsbury’s 14.9 15.2 -2.2
Asda 13.7 14.0 -2.3
Morrisons 9.4 10.1 -6.7
Aldi 9.1 8.2 11.3
Lidl 7.0 6.1 13.9
Co-operative 6.3 6.5 -2.0
Waitrose 4.6 5.0 -6.3
Iceland 2.3 2.3 -0.2
Ocado 1.8 1.8 0.7
Source: Kantar
($1 = 0.8350 pounds)
(Reporting by James Davey; Editing by Sandra Maler)
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured annually and can impact the cost of living.
Grocery inflation refers to the increase in prices specifically for food and grocery items over a period of time, affecting consumers' overall spending on groceries.
Own-label products are items sold under a retailer's brand name, often produced by third parties. They are typically priced lower than branded products, appealing to cost-conscious consumers.
Market share is the portion of a market controlled by a particular company or product, expressed as a percentage of total sales in that market.
The cost of living crisis occurs when the prices of essential goods and services rise significantly, making it difficult for consumers to afford basic necessities.
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