UK

Grocery price inflation hits 14.7% and still too early to call the ceiling, says Kantar

By Tony Corbin in Industry News 8th November 2022

Take-home grocery sales rose by 5.2% in the 12 weeks to 30 October 2022 according to the latest figures from Kantar, the fastest rate of market growth since April 2021.

Four-week grocery price inflation has also hit another record high since Kantar began tracking prices in this way in 2008, now sitting at 14.7%.

Fraser McKevitt, head of retail and consumer insight at Kantar, said: “Yet again, we have a new record high figure for grocery price inflation and it’s too early right now to call the top.

“Consumers face a £682 jump in their annual grocery bill if they continue to buy the same items and just over a quarter of all households [27%] now say they’re struggling financially, which is double the proportion we recorded last November.

Consumer concerns

“Nine in ten of this group say higher food and drink prices are a major concern, second only to energy bills, so it’s clear just how much grocery inflation is hitting people’s wallets and adding to their domestic worries.”

Own label sales have jumped again by 10.3% over the latest four weeks, as shoppers adopt different strategies to manage their budgets.  The branded goods market grew far slower at 0.4%.

McKevitt added: “Food and drink spending is generally non-discretionary so it’s not easy for shoppers to cut back the amount they buy.

“Many are looking to reduce costs in other ways and the big shift to own label is still accelerating.  While some of the rise will be down to price inflation, we can clearly see the trend in sales of the very cheapest value own label ranges, which are up by a whopping 42%.

“These items currently represent just under 3% of the market, although retailers have been adding new products in recent months, so it will be interesting to see if this continues.”

Some consumers found light relief at Halloween this year although sales were down compared with 2021.

“Our data runs for the four weeks to 30 October so picks up all but the final purchases shoppers made for Halloween,” said McKevitt.

“The data shows just over one in ten households bought a pumpkin in October, but sales didn’t match the levels we saw last year.  There’s clear evidence that the new regulations for products high in fat, sugar and salt are changing the way these items are sold.  The proportion of confectionery bought on promotion during the month of October was 26%, down from 36% this time last year.”

“This time last year two million consumers had already bought their festive Christmas pudding.  We’ve seen 32% fewer shoppers doing that this time around, suggesting people are not trying to spread the cost of their purchasing – at least not in October.

World Cup

“This Christmas is going to be a bit different of course, with the men’s football World Cup kicking off on 20 November.  The novelty of two home nations playing for the first time in nearly 25 years should generate a lot of excitement and could boost sales at the tills depending on when the games fall.  Beer in particular does well when the football is on.

“During the 2018 men’s World Cup, the number of shoppers buying beer to enjoy at home tripled on the day of England’s first match against Tunisia.  The evening games for the 2022 tournament will likely generate the biggest sales including England’s match against the US on 25 November.”

‘Big Four’

Aldi was the fastest growing retailer in the latest period, increasing its sales by 22.7% year on year to now hold a 9.2% market share.  Lidl boosted sales by 21.5% to take its market share to a new record high of 7.2%.

Asda again led the traditional ‘Big Four’ with sales growing by 5.3%, maintaining an overall market share of 14.3%.  Meanwhile, sales at Sainsbury’s increased by 3.3% with its market share now at 14.9%.  The largest retailer Tesco had a 27.0% share and saw sales grow by 3.1%.  Morrisons’ market share is now 9.0%.

Iceland grew slightly ahead of the market, with sales increasing by 5.3%.  Co-op’s sales rose by 3.3%, while Waitrose’s sales dipped by 1.9%.  Online retailer Ocado held sales flat versus last year and it has a 1.6% share of the market which equals the share of symbols and independents.

Total Till Roll – Consumer Spend 12 weeks to 31 Oct 2021 Share 12 weeks to 30 Oct 2022 Share Change YoY     £m % £m % %     Total Grocers 28,893 100.0% 30,398 100.0% 5.2%     Total Multiples 28,406 98.3% 29,926 98.4% 5.4%     Tesco 7,964 27.6% 8,209 27.0% 3.1%     Sainsbury’s 4,385 15.2% 4,531 14.9% 3.3%     Asda 4,128 14.3% 4,346 14.3% 5.3%     Morrisons 2,878 10.0% 2,747 9.0% -4.6%     Aldi 2,290 7.9% 2,811 9.2% 22.7%     Lidl 1,800 6.2% 2,187 7.2% 21.5%     Co-op 1,819 6.3% 1,880 6.2% 3.3%     Waitrose 1,448 5.0% 1,421 4.7% -1.9%     Iceland 653 2.3% 688 2.3% 5.3%     Ocado 489 1.7% 488 1.6% 0.0%     Other Multiples 552 1.9% 618 2.0% 12.1%     Symbols & Independents 487 1.7% 472 1.6% -3.1%

No point raising Primark prices if consumers are cash-strapped - AB Foods boss


LONDON (Reuters) - There is little point raising fashion retailer Primark's low prices when consumers are short of cash, the boss of its owner said on Tuesday, adding that the group could expand its customer base if rivals take an alternative approach.


Shoppers holding newly environmentally themed bags stand outside a Primark store in Liverpool© Thomson Reuters

"With cash starved consumers there's not much point," George Weston, CEO of Associated British Foods, told Reuters.

He said if Primark raised prices further it would sell less and undermine its value credentials in the eyes of consumers.

"There's a chance we'll come through strongly with increased market share if others take different decisions on price," he said after AB Foods reported full year results.

Weston said Primark shoppers were generally being cautious on spending and budgeting more.

"People are buying essentials when they need them, not in anticipation of needing them," he said.

However, he noted that cold weather items, such as hats, scarves and coats, and items to keep people warm in the house, such as snuddies and thermal leggings have been selling "incredibly well, because we think people have been trying not to turn their central heating on."

Weston also reckons Christmas sales have started earlier.

"People are spreading their Christmas purchases across three or four pay days, rather than relying on cash that they have in hand in December," he said.

He said Primark stores in the UK were still performing better than stores in continental Europe."Northern Europe has a well developed habit of saving money when they know there's a bill to come, so Germany, Netherlands, Austria are all lagging on the sales front ... Spain and Italy are better," he said.

(Reporting by James Davey, Editing by Paul Sandle and Kate Holton)