Grocery price inflation has reached the highest level since 2008, when Kantar began recording it, hitting the 17.1% mark for the first time in the four weeks to 19 February.
It comes as inflation eases in the UK, dropping from 10.5% in December to 10.1% in January, according to the latest figures from the Office for National Statistics. But with the soaring cost of energy and food prices in particular still rocketing, the cost of living crisis is yet to abate.
Supermarket own labels continue to perform well as a result, with sales up 13.2% this month, well ahead of branded products, which increased by a more modest 4.6%. It’s a “trend that shows little sign of stopping”, according to Fraser McKevitt, head of retail and consumer insight at Kantar, as consumers look to grapple with soaring costs.
This month marks a full year since monthly grocery inflation jumped from about 4%. It means if households continue to buy the same groceries they were a year ago they will spend an additional £811 on their average annual bill.
The battle to offer best value for consumers continues in this intensely competitive sector, particularly as the traditional retailers look to protect market share from the discounters.
Fraser McKevitt, Kantar
Grocery inflation now stands at 15.6% for the 12 weeks to 19 February, with prices rising fastest on essentials like milk, eggs and margarine, according to Kantar.
Consumers have been continually trading down to own label products since the cost of living crisis began, with sales of white labels rising 9.3% in January compared to just 1% for branded goods, and 13.3% in December versus 4.7% for branded lines.
“The battle to offer best value for consumers continues in this intensely competitive sector, particularly as the traditional retailers look to protect market share from the discounters,” McKevitt says.
“Own label ranges have been one obvious focus and shoppers have consistently bought them over brands since February last year.”
Aldi holds on to title of fastest growing supermarket
Consumers are increasingly shifting spend to the discounters too, with Aldi’s market share rising to 9.4%, up from 8% a year ago. It remains the fastest growing supermarket, with sales up 26.7%.
Lidl has also seen a big boost to sales, up 25.4% over the period to give it a market share of 7.1%. Its market share is up from 6.1% over the same period in 2022.
The UK’s biggest three supermarkets increased sales by a more modest amount, with Tesco up 6.6%, Sainsbury’s (6.2%) and Asda (5.9%). All have dropped market share marginally compared to last year. Tesco’s now stands at 27.3% (down from 27.7% in February 2022), Sainsbury’s is 15.2% (down from 15.5%) and Asda’s is 14.3% (down from 14.6%).
Morrisons saw its sales slip by 0.9% taking its market share down to 9%.