Workers turn to packed lunches as grocery inflation remains stubbornly high

Grocery price inflation ticked down slightly to 6.8%, a 0.1 percentage point decrease from the 6.9% figure in December, according to the latest grocery market share data from Kantar.

Take-home grocery sales during the period grew in value by 2.9% over the period, as Kantar flagged that millions of UK customers were changing their behaviour to “better manage their costs”.

“There’s evidence to suggest that people are opting more for homemade meals to keep budgets in line,” said head of retail and consumer insight at Kantar, Fraser McKevitt. “86 million more lunchboxes were brought to work last year, for example.

“Looking ahead to February, it will be interesting to see how this plays out on Valentine’s Day, and if couples will opt for more low-key celebrations. This was certainly the case in 2023, when we saw a massive £43m spent on supermarket meal deals costing £10 or more in the week before the special day.”

Spending on alcohol in January also fell by more than half compared with December. Kantar said almost 6% of beer packs sold in the month were zero- or low-alcohol options, marking a 4% jump at the end of last year.

Sales of own-label, plant-based ranges increased by 8% on the month as Veganuary got underway.

McKevitt said: “Health always comes to the fore as a priority for consumers in January, but what’s interesting this month is that we’re not seeing as big a spike in health-related categories as we have done in previous years.

“That’s because people are now buying more of the typical January ‘health kick’ items throughout the year. 9% of annual own-label, plant-based sales were made in January in 2023, a steady decline compared with the 11% of sales in 2020.”

In terms of market share, both Sainsbury’s and Tesco gained market share over the 12 weeks to January 21, 2024, compared with last year.

Sainsbury’s increased sales by 8.1% to take 15.7% of the market, up 0.3 percentage points year on year. Tesco, by comparison, grew 6.3% and increased its market share 0.1 percentage points to 27.6%.

Lidl was the fastest growing of the UK supermarkets for the fifth straight month and was the only retailer to see double-digit growth over the 12 weeks. Spending at the discounter jumped 11.9%, bringing its market share to 7.5%.

Aldi also grew ahead of the market, with sales up 7.2% and its market share inching up by 0.1 percentage points to 9.3%.

Sales at Morrisons rose 2.8%, with the grocer now holding an 8.8% share of the market. Asda’s share stands at 13.7%, with sales up 2.1% year on year.

Waitrose sales jumped 3.5% to hold 4.6% of the market, while Co-op accounts for 5.3% with sales up 1.8% in the period. Iceland reported growth of 2.3%, with 2.4% of the market.

Online sales during the period jumped 6.3% in the period, ahead of Ocado’s 4% growth.