Just when it seemed British supermarket consumers were making slight gains against inflation, new data released by Kantar Worldpanel shows they are not. In fact, their positions are worse than ever.
Kantar revealed that in the month leading up to 19th February, grocery price inflation soared to a staggering 17.1%, the largest its analysts say they’ve seen. If shoppers don’t start watching their wallets, Kantar says they could see a more than £800 increase to their yearly grocery shops.
The number of UK shoppers who are struggling has reached 1 in 4 (up from 20% last year) and they are not only faced with soaring energy costs and high supermarket costs but empty shelves in the produce aisles. Though grocery sales surprisingly jumped by 8.8% during the stretch, it is uncertain whether that trend can continue.
“Though not captured in this data set, we’ll be closely following the impact of these shortages on sales in the coming weeks,” said Fraser McKevitt, head of retail and consumer insight at Kantar. “While 43% of all grocery baskets contain at least one fresh produce item, pack limits are unlikely to drastically effect consumers as we usually buy fruit and veg in smaller quantities. For instance, only 1% of tomato purchases last year involved more than three packs.”
Inflation has been a concern since the beginning of the COVID-19 pandemic, but there were signs through the end of 2022 and early 2023 that it was easing, though still at a robust 10%. However, this new data, along with rising costs of miscellaneous service items, might suggest otherwise.
Over the course of the past six months or more and recognizing the severity of the economic problems facing consumers, retailers have tried to slash prices across their stores. That is likely to continue for the foreseeable future, McKevitt said.
“Supermarkets and shoppers are adapting to manage rising prices,” he said. “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. Own-label ranges have been one obvious focus, and shoppers have consistently bought them over brands since February last year.”
In fact, steering clear of high-priced brands, shoppers have increased those purchases by 13.2% in the past month alone. Two-third of all consumers polled indicated that food and drink prices are driving them to explore less-expensive options.