Grocery sales grow in August as food inflation continues to fall

Grocery price inflation fell 2.2 percentage points to 12.7% in the four weeks to August 6, 2023, according to the latest data from Kantar. As a result, overall take-home grocery sales increased by 6.5% over the period, down from 10.4% in July.

This was the “second sharpest monthly fall” in food inflation since 2008, according to Kantar head of retail and consumer insight Fraser McKevitt.

“Prices are still up year on year across every supermarket shelf but consumers will have been relieved to see the cost of some staple goods starting to edge down compared with earlier in 2023,” he added.

Customers paid £1.50 for four pints of milk in August, down from £1.69 in March. The average cost of a litre of sunflower oil is now £2.19, down 22p from the spring.

Own-label goods remained popular in August, with sales up 9.7% compared to branded product sales which rose 6.4%.

“Own-label sales continue to outpace branded, although the gap between the two is closing,” said McKevitt. “Buying supermarket lines is just one of the ways people have been trying to save money at the tills and we can see the impact on how much they are spending.”

However, the wet weather in the summer has put the dampeners on sales of summer favourites – with ice cream sales down 30%, while sales of soup during the period were up 16%.

Tesco and Sainsbury’s outperform

Supermarket giants Tesco and Sainsbury’s both outperformed the market this month – driven by sales growth of 9.5% and 9.3% respectively over the 12 weeks to August 6.

In doing so, Tesco boosted its market share to 27%, while Sainsbury’s held firm year-on-year at 14.8%.

Asda sales jumped 7.7% in the month, pushing its market share to 13.7% while Morrisons has an 8.7% share with sales growth of 2.3% year-on-year.

For the fourth consecutive month, Aldi was the fastest-growing grocer with sales jumping 21.2% compared to the same period in 2022. The discounter now has a market share of 10.2% – up 1.1 percentage points year-on-year.

Lidl’s sales jumped 19.8%, and the retailer now holds a 7.7% share of the grocery market.

Sales at Waitrose and convenience specialist Co-op rose 4.4% and 3.4% respectively, bringing their market shares to 4.4% and 6.1% respectively.

Frozen food specialist Iceland increased sales by 6.7% to take a 2.3% share of the market, while Ocado’s share stands at 1.7% with spending at the online grocer growing 1.4%.