Grocery price inflation adds €532 to annual shopping bill in Britain

Forecasts suggest food inflation could hit 20% in Britain by next year

Consumers are shopping around for better prices.

British grocery inflation hit 9.9% in the four weeks to July 10, adding £454 (€532) to annual bills there, amid a worsening cost of living crisis, new industry data showed. 

Market researcher Kantar said the inflation rate was the second highest it has seen since it started tracking supermarket prices in this way in 2008.

"We're likely to surpass the previous high come August," warned Fraser McKevitt, Kantar's head of retail and consumer insight.

The researcher said prices are rising fastest in markets such as dog food, butter and milk. 

Kantar publishes its latest monthly survey for Irish supermarkets and grocery spending by households next week.         

Food inflation in Britain could reach 15% this summer and 20% early next year according to some forecasts. 

Kantar said sales on a value basis rose 0.1% at market leader Tesco over the 12 weeks to July 10, but fell at Sainsbury's, Asda, and Morrisons as shoppers switched to German-owned discounters Aldi and Lidl.

Switching retailers

Lidl was Britain's fastest growing grocer over the 12 weeks with sales up almost 14%, while Aldi's were up 11.3%.

Both hit record market shares, with Lidl at 7% and Aldi at over 9% — just 0.3% below Morrisons, Britain's fourth larges supermarket. 

"Over 67% of people in Britain shopped in either an Aldi or a Lidl in the past 12 weeks, with 1.4 million additional households visiting at least one of the discounters in the latest three months compared with last year," said Mr McKevitt.

Kantar said as prices rise British households are also increasingly turning to own-label products to drive down the cost of their weekly shop. Sales of supermarkets' own lines grew just over 4% over the 12 weeks, while sales of branded items fell 2.4%.

Facing the toughest economic conditions in decades, Britain's food retailers are monitoring each others' prices more than ever before. 

Kantar said its data also showed households preparing for the current heatwave, with sales of ice cream and suncare products soaring by 14% and 66% respectively over the past four weeks.

It said total British supermarket sales rose 0.1% over the 12-week period — the first time the market has registered growth since April 2021.

Kantar said Tesco had a share of just over 27% of the overall spend on groceries in British supermarkets, followed by Sainsbury's on 15% and Asda on a share of 13.7%. Morrisons, Aldi, and Lidl secured shares of 9.4%, 9.1%, and 7%, respectively. 

Reuters