By James Davey
LONDON, Jan 31 (Reuters) - 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 in markets such as milk, eggs and dog
food.
It said UK households now face an additional 788 pounds
($974) on their annual shopping bills if they don't change their
behaviour 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 government
support on household energy bills is scaled back and mortgage
rates rise.
The Bank of England is expected to raise its main interest
rate by half a percentage point to 4% on Thursday.
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 1.0%.
Market leader Tesco , Sainsbury's and
Morrisons have all 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 programmes, the proportion of spending
on promotions dropped to its lowest level since at least 2008,
Kantar noted.
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 6.0%.
Although Morrisons was again the laggard, with sales down
1.9%, its performance continued to improve.
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
Source: Kantar
($1 = 0.8093 pounds)
(Reporting by James Davey
Editing by Mark Potter)
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