According to the latest Kantar figures, like-for-like grocery price inflation, currently around 3.8%, could add an extra £180 to the average household’s annual grocery bill.
The latest four-week grocery price inflation rate marks a 0.3 percentage point rise from December 2021. Commenting on the rise, Fraser McKevitt, head of retail and consumer insight at Kantar, said: “We’re now likely to see shoppers striving to keep costs down by searching for cheaper products and promotions. Supermarkets that can offer the best value stand to win the biggest slice of spend.”
Take-home grocery figures show that supermarket sales fell by 3.8% over the 12 weeks to 23rd January 2022. Kantar said that these year-on-year figures reflect tough comparisons against the high demand of the lockdowns at the start of 2021, with spending remaining 8% higher than pre-pandemic times. These market growth figures do not include on-the-go food and drink purchases, which are likely to be higher than last year.
Increasing consumer confidence
McKevitt said that increasing confidence about heading out, combined with the return to the office, means pre-pandemic shopping patterns are beginning to emerge.
He said: “Since the first lockdown in March 2020, shoppers have been buying in bulk and visiting the supermarket less often. But basket sizes are now 10% smaller than this time last year, hitting their lowest level since the beginning of the pandemic, while footfall increased by 5% as every major retailer was busier in their stores.
“Changing habits were most marked in London, where take-home sales of food and drink decreased by 11%. This suggests that people in the capital were the quickest to embrace eating out in cafés, pubs, and restaurants as many of us returned to city centres.”
Increased confidence in visiting stores was also reflected in online grocery sales. McKevitt explained: “Digital orders accounted for 12.5% of all grocery spend, almost double the pre-pandemic proportion. Though online purchases are down year-on-year by 15%, it’s important to remember that this is in comparison with the strict lockdown we faced in January 2021 when the public was staying indoors when possible.”
Plant-based boost
According to the data, this year’s Veganuary led to strong results for plant-based products. McKevitt said: “After an indulgent Christmas, the new year brought the usual commitment to making healthier choices.
“Though fresh fruit, salad and vegetable sales were down compared with last year, plant-based products proved more popular than ever. A record 10.7 million households bought at least one item that was a dairy alternative, a meat substitute or labelled as plant-based this January. Sales growth for these veggie favourites was 0.5%, well above the wider grocery market.”
Market share report
Only three retailers recorded year-on-year growth this period, but every single grocer boosted its sales over the last two years. Ocado sales grew by 2.3% over the past 12 weeks, with its share of the grocery market increasing by 0.1 percentage points to 1.8%. That number almost doubles in London specifically, where the grocer accounts for 3.4% of all sales.
Lidl and Aldi recorded simultaneous growth for the first time since June last year. Lidl was the fastest growing physical retailer and increased its sales by 1.2%, boosting its market share by 0.3 percentage points to 6.2%. Aldi gained an additional 1.1 million shoppers over the past 12 weeks, helping its share grow by 0.4 percentage points to 7.8%. The grocer’s sales also rose by 1.1%.
Both Tesco and Waitrose performed ahead of the market over the past 12 weeks and increased share. Tesco’s share moved up from 27.3% last year to 27.9%, marking a full year of market share gains for the retailer. Waitrose saw the greatest footfall increase of any supermarket, helping its share increase by 0.1 percentage points to 5.1%.
Sainsbury’s now holds 15.6% of the market, Asda 14.4% and Morrisons 9.9%. Co-op’s share stands at 5.7% and Iceland at 2.4%.
