LONDON — British grocery inflation hit
a record 16.7% in the four weeks to Jan. 22, dealing another
blow to consumers battling an escalating cost-of-living crisis,
industry data showed on Tuesday.
Market researcher Kantar said grocery inflation was at its
highest since it started tracking the figure in 2008, with
prices rising fastest for essential products such as milk,
butter, cheese, eggs, dog food and toilet rolls.
It said UK households now face an additional 788 pounds
($974) on their annual shopping bills if they don’t change their
behavior to cut costs.
“Late last year, we saw the rate of grocery price inflation
dip slightly, but that small sign of relief for consumers has
been short-lived,” Fraser McKevitt, Kantar’s head of retail and
consumer insight said, noting the figure jumped a “staggering”
2.3 percentage points from December’s reading.
After a tough 2022, British consumers are facing an even
tighter squeeze on their finances this year as the government
cuts back support on household energy bills and mortgage rates
The Bank of England is expected to raise its main interest
rate by half a percentage point to 4% on Thursday.
Earlier this month, Ken Murphy, chief executive of market
leader Tesco, said grocery inflation may not have
peaked but was hopeful it would by the middle of the year.
Official data published this month showed overall consumer
price inflation fell to 10.5% in December. The Bank of England
expects it to fall to around 5% by the end of 2023 as energy
Kantar said sales of supermarkets’ own-label lines grew 9.3%
in January, while sales of branded products, which are generally
more expensive, were up by just 1%.
Supermarket chains Tesco, Sainsbury’s and Morrisons
have said inflation for their customers is less than Kantar’s
headline number as they dial-out some of the hit through trading
down to cheaper items.
With supermarkets focusing on price matching schemes and
leveraging their loyalty programs, the proportion of spending
on promotions dropped to its lowest level since at least 2008,
It said that over the 12 weeks to Jan. 22, UK grocery sales
rose 7.6% year-on-year, masking a drop in volumes when
accounting for inflation.
German-owned discounters Aldi and Lidl were again the
fastest growing grocers, partly due to new store openings, with
sales up 26.9% and 24.1%, respectively.
Sainsbury’s sales were up 6.1%, while sales at Tesco and
Asda were both up 6%.
Although Morrisons was again the laggard, with sales down
1.9%, its performance continued to improve.
Shares in Tesco were down 0.3% in morning trading, while
Sainsbury’s was down 1.2%.
UK grocers’ market share and sales growth (%)
Market share Market share % change in
12 wks to 12 wks to sales
Jan. 22 2023 Jan. 23 2022 (yr-on-yr)
Tesco 27.5 27.9 6.0
Sainsbury’s 15.4 15.6 6.1
Asda 14.2 14.4 6.0
Aldi 9.2 7.8 26.9
Morrisons 9.1 9.9 -1.9
Lidl 7.1 6.2 24.1
Co-operative 5.5 5.7 3.7
Waitrose 4.7 5.1 -0.6
Iceland 2.5 2.4 10.6
Ocado 1.8 1.8 7.6
($1 = 0.8093 pounds)
(Reporting by James Davey; Editing by Mark Potter and Arun