According to the latest figures released by Kantar, the average annual grocery bill is on course to rise by £380, over £100 more than reported in April this year.
Fraser McKevitt, head of retail and consumer insight at Kantar, said that the increase in spend showed “just how sharp price increases have been recently and the impact inflation is having on the sector.”
Supermarket sales fell by 1.9% during the 12-weeks to 12th June 2022, which according to Kantar, still marked the best market performance since October last year.
Over the latest four-weeks sales grew by 0.4% versus the same period in 2021. However, despite the more positive figures, inflation remains a challenge for the sector and like-for-like grocery prices rose by 8.3% over the past month, up 1.3 percentage points on May to reach their highest level since April 2009.
McKevitt continued: “The sector hasn’t been in growth since April 2021 as it measures up against the record sales seen during the pandemic. However, these latest numbers show the market is, to an extent, returning to pre-Covid norms as we begin comparisons with post-lockdown times.
“The inflation number makes for difficult reading and shoppers will be watching budgets closely as the cost-of-living crisis takes its toll.”
Own-brand growth
Kantar’s analysis shows that consumers are taking steps to manage rising prices at the tills. McKevitt explained: “Shoppers have swapped branded items, which have declined by 1%, for own-label products. Sales of these lines, which are often cheaper, have risen by 2.9%, boosted by Aldi and Lidl’s strong performances, both of whom have extensive own-label repertoires.
“We can also see consumers turning to value ranges, such as ASDA Smart Price, Co-op Honest Value and Sainsbury’s Imperfectly Tasty, to save money and together all value own-label lines grew by 12%.”
Online decline
Store footfall jumped by 3.4% over the latest four weeks, while online fell to its lowest proportion of the market since May 2020 at 12%. McKevitt said: “We’re still way ahead of our continental neighbours when it comes to buying groceries online and one in five British households makes an order each month, the highest proportion in Europe. But online sales have been suffering since the end of the pandemic. This is the twelfth month in a row they’ve been in decline and digital orders fell by almost 9% in June.
“As well as the return to pre-Covid habits, this drop could be the result of shoppers looking to cut costs by avoiding delivery charges. The sunnier weather may also be pushing up store footfall, as people decide it’s warm enough to walk or cycle to their local supermarket.”
Jubilee success
Sales during the week of the Platinum Jubilee (to 5th June) were £87 million higher than on average in 2022. McKevitt explained that despite the rising cost of living, the British public “got into the jubilee spirit.”
Purchases of ice cream increased by 35% over the week compared to the average in 2022. Equally, sales grew by 16% for lemon curd, 58% for fresh cream, 18% for Swiss rolls and 9% for custard.
Market-share
Lidl was once again the fastest growing grocer this period, pushing its sales up by 9.5% over the 12-weeks to reach a 6.9% market share. Sales at Aldi rose by 7.9%, moving its share up versus last year by 0.8 percentage points to 9%.
Iceland held its market share at 2.3%. The retailer has seen especially strong sales thanks to its 10% discount offer for over 60s, with the deal helping nearly double its market share among that demographic on Tuesdays over the past month.
While it didn’t achieve year-on-year growth, Tesco out-performed the total market to nudge its share up to 27.3%. Online retailer Ocado also did better than the wider market trend. The grocer’s sales fell by 2.3%, but it was able to retain its 1.8% slice of the market.
Sainsbury’s now holds 14.9% of the market, while Asda has 13.7% and Morrisons 9.6%. Convenience retailer Co-op accounts for 6.2% of sales and Waitrose holds 4.8%.
