Shoppers in the UK have faced a jump in grocery prices for the first time in over a year and are turning to promotions and deals to make their budgets stretch further.
Grocery inflation increased in the four weeks to August 4, 2024 by 1.8% – the first hike in food prices since March 2023, according to the latest Kantar grocery market share data.
On supermarket shelves prices rose during the period across 182 product categories and fell across 89 others. Items like kitchen towels and baked beans are now 7% and 5% cheaper, respectively, than they were a year ago.
Kantar head of retail and consumer insight Fraser McKevitt said: “Having reached its lowest rate in almost three years in July, August saw inflation nudge up again slightly. While this is noticeable following 17 straight months of falling rates, it actually marks a return to the average levels seen in the five years before the start of the cost-of-living crisis.
“With this kind of pricing spread, shoppers will find that the type of products they’re putting in their baskets will really dictate how much they pay. They’re continuing to take advantage of the wide range of promotions being offered by the grocers to help keep the price of shopping down. Spending on deals rose by 15%, while sales of products at their usual price saw no increase.”
Despite the jump in prices, McKevitt said that the period saw people getting into the “spirit of the summer of sport” and enjoying the best of the weather after a cold and wet start to the summer.
Sales of wine were up 35%, nuts upsurged 60% and crisps rose 10% on the Friday of the Olympics opening ceremony in Paris. The UK also spent £10m on beer on the day of the European Football Championship final – the most spent on a Sunday in three years.
With the arrival of the warmer weather, sales of burgers leapt 32% compared with the same time last year as people across the UK finally fired up their barbeques. Chilled salads jumped 22% and ice cream sales for the period were also up 23%.
However, despite the warmer weather, the persistence of Covid-19 and summer colds saw a 28% rise in the sale of cough lozenges.
Asda woes continue
While pureplay giant Ocado continued its six-month run as the fastest growing grocer in the UK, the well-documented woes at Asda also continued with the supermarket’s sales dropping 6% in the period.
The grocer’s market share now stands at 12.6%, down more than a whole percentage point from its 13.7% share in the 12 weeks to August 6, 2023.
While Aldi’s sales for the period inched up 0.5% in the period, its market share also slipped year on year down to 10% from 10.2% this time in 2023.
Lidl by comparison went from strength-to-strength, with sales for the period up 7.8%. Buoyed by its sales rise, Lidl won an extra 0.4 percentage points in the grocery market, taking its total share to 8.1%.
In an unusual intervention, Lidl GB boss Ryan McDonnell heralded the discounter’s latest set of results and said he was “thrilled our loyal customer base is continuing to grow”.
“Our journey began three decades ago, and today, we stand stronger than ever. But this is just the beginning – we’re firmly focused on the next 30 years and confident about the future as we double down on our mission to ensure all households up and down the country have access to Lidl’s high-quality products at affordable prices,” he said.
Tesco, the UK’s largest supermarket, continued its run of winning market share every month in the last year, with its hold on total market share up to 27.6% with a 4.9% increase in sales.
Morrisons sales inched up 1.4% in the period, with its market share sitting relatively flat at 8.6%.
Meanwhile, Waitrose enjoyed its strongest sales month since November 2023, increasing its share by 0.1 percentage points to 4.5%. Iceland sales increased 4.1% to hold a 2.3% share, while the Co-op held on to 5.9% of the market.
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