Households face a potential £837 annual increase in the cost of their regular grocery basket, even though consumers are increasingly shopping around for the best deal.
Customers are now paying hundreds more per year as grocery inflation in the United Kingdom reaches a new record high, but there are warnings that the worst is yet to come.
As food inflation reaches 17.5%, Kantar Worldpanel reports that households now face a potential £837 annual increase in the cost of their regular purchasing basket, even though consumers are increasingly shopping around for the best value.
In the four weeks before March 19, foot traffic increased at “every single grocer” and households now visit three or more of the top 10 retailers per month on average, with chains “battling it out” to attract customers.
In response to concerns about the impact of salad shortages in some British supermarkets, however, Kantar reported that consumers had turned to independents to fill any gaps in availability.
Fraser McKevitt, the company’s director of retail and consumer insight, stated, “Despite concerns about shortages, the percentage of baskets containing tomatoes, cucumbers, or peppers at the 10 largest grocers in March remained unchanged from February.
The volume of tomatoes, peppers, and cucumbers in baskets increased by 32.2%, 26.2%, and 21.2%, respectively, in independent grocery stores, catering to customers who couldn’t find what they desired in larger supermarkets.
The worst has not yet occurred.
According to the British Retail Consortium (BRC)-NielsenIQ index, prices in stores are now 8.9% higher than they were a year ago, up from 8.4% in February.
Chocolate, candies, and carbonated beverages have seen price increases due to the rising cost of sugar and high manufacturing expenses. Due to weak harvests in Europe and North Africa, the price of fruits and vegetables has also increased.
However, there are warnings that the United Kingdom has not yet seen the worst of the rising prices.
Helen Dickinson, chief executive officer of the British Retail Consortium, stated that retail price inflation has not yet peaked.
“Food price increases are likely to moderate in the coming months, particularly as the growing season begins in the United Kingdom, but broader inflation is anticipated to remain elevated.”
Mike Watkins, director of the retailer and business insight at NielsenIQ, stated, “Inflation continues to affect the purchasing power of consumers, and rising energy costs beginning in April will add to the strain.
“Since food prices have risen, retailers have seen an increase in foot traffic but a decrease in basket size, as consumers manage their weekly food costs by shopping less frequently but more frequently and by pursuing the lowest prices.
As Easter approaches, some retailers on the high street will also offer discounts and promotions to encourage consumers to make purchases.
The most rapidly expanding supermarkets
Mr. McKevitt stated that nine out of ten consumers now carry store loyalty cards in their wallets and that consumers are also purchasing more private-label products, with sales up 15.8% during the period compared to the same time last year.
However, he added, “People are reserving some space in their shopping carts for the brands they already know and adore.” Outside of the discounters Aldi and Lidl, branded products continue to account for 52 percent of the market, and sales have increased by 7.2% over the past month, the fastest rate since February 2021.
Kantar reported that Lidl was the fastest-growing supermarket, with revenues increasing by 25.8% and a 7.4% market share.
According to the data, Tesco remains Britain’s largest grocery store with a market share of 26.9%, followed by Sainsbury’s with 14.8% and Asda with 14.4%.
