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TOP NEWS: UK grocery price inflation cools to lowest level in a year

12th Sep 2023 08:46

(Alliance News) - Annual grocery price inflation in the UK decelerated to 12.2% in the four weeks that ended September 3, from 12.7% a month before, according to survey data from Kantar on Tuesday.

During the same period, take-home grocery sales increased by 7.4% from a year before, rising from 6.5% a month ago.

"Grocery price inflation is down for the sixth month in a row but 12.2% won't be a number to celebrate for many households. Our data shows that 95% of consumers are still worried about the impact of rising grocery prices, matched only by their concern about energy bills," said Fraser McKevitt, head of retail & consumer insight at Kantar.

Notably, Wilko's market share of non-food groceries such as toiletries and household goods is 0.5 percentage points higher than in July, as consumers capitalised on its collapse, Kantar said.

Grocery price inflation in the longer 12-week period to September 3 was 13.0%, Kantar said, down from 14.4% in the 12 weeks to August 6. Prices rose the most for eggs, sugar confectionery and frozen potato products.

In that period, sales at the UK's largest supermarket Tesco rose 9.3% to GBP8.86 billion from GBP8.11 billion year-on-year, improving its market share to 27.2% from 26.9%.

Sainsbury's sales rose 9.1% to GBP4.82 billion from GBP4.42 billion, with its market share growing to 14.8% from 14.6%.

Asda sales increased 5.1% to GBP4.49 billion from GBP4.27 billion, with its market share falling to 13.8% from 14.1%.

The biggest increase was, as in the past months, by the two German discounters Aldi and Lidl, the only supermarkets with double-digit percentage year-on-year sales growth.

Aldi shares jumped 17% to GBP3.28 billion from GBP2.80 billion, with its market share now at 10.1%, up from 9.3%.

Lidl shares surged 16% to GBP2.47 billion from GBP2.13 billion, and its market share rose to 7.6% from 7.1%.

Regarding Aldi and Lidl, KcKevitt said: "We expect this performance to continue as inflation remains stubbornly high, however, growth rates for both the discounters have been slowing in recent months as they annualise against rapid rises last year."

Between Aldi and Lidl in terms of market share is Morrisons, seeing a 2.0% growth to GBP2.80 billion from GBP2.74 billion, but its market share fell to 8.6% from 9.1%.

Co-Op sales rose 2.5% to GBP2.00 billion from GBP1.95 billion, with its market share contracting to 6.1% from 6.5%.

Waitrose saw a sales increase of 5.6% to GBP1.49 billion from GBP1.41 billion. Its market share fell to 4.6% from 4.7%.

Iceland sales rose 4.3% to GBP749 million from GBP718 million, as its market share decreased to 2.3% from 2.4%.

Ocado sales also rose 4.3%, to GBP537 million from GBP515 million, with its market share falling to 1.6% from 1.7%.

McKevitt said: "One of the big stories of recent times has been the boost in own-label sales which dominate Aldi and Lidl's shelves. Sales grew again by 9.9% in the latest month and supermarket lines now make up over half of everything we buy, up from 48% in August 2013. This is equivalent to a GBP3 billion shift in sales away from brands. The discounter model of offering everyday low value and fewer promotions has also caught on in the wider market, with only 26% of spending now on deals compared with 38% ten years ago."

Tesco shares were up 0.7% at 261.50 pence early Tuesday in London. Sainsbury's shares were up 0.5% at 270.40p. Ocado's were 0.2% higher at 810.00p, while M&S was down 0.2% at 220.10p.

By Tom Budszus, Alliance News reporter

Comments and questions to [email protected]

Copyright 2023 Alliance News Ltd. All Rights Reserved.

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