Grocery price inflation in the UK has slowed to its lowest level in more than a year, but it remains in double digits and most consumers still worry about rising supermarket bills.
Annual supermarket inflation dropped for the sixth month in a row, to 12.2% in the four weeks to 3 September, according to the latest data from the analysts Kantar.
Fraser McKevitt, the head of retail and consumer insight at Kantar, said: “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.
“After a full year of double-digit grocery inflation, it’s no surprise that just under a quarter of the population consider themselves to be struggling financially.”
The discount retailers have enjoyed a sales increase as cost-strapped shoppers seek out bargains. It is a year since Aldi became the fourth-largest supermarket in Britain, and it has made some of the biggest market share gains over the past 12 months, alongside Lidl. In the past month, Aldi’s sales increased by 17.1% while Lidl expanded by 16%. Together, they control 17.7% of grocery sales.
The boom in the cheaper own-label products that dominate the shelves at Aldi and Lidl continues. Sales grew again by 9.9% in the latest month and own-label supermarket lines now make up more than half of everything we buy, up from 48% in August 2013.
McKevitt said this was equivalent to a £3bn shift in sales away from branded products. “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% 10 years ago,” he added.
Sainsbury’s and Tesco were the fastest-growing traditional retailers in the past month, with sales up by 9.1% and 9.3% respectively. Tesco increased its market share to 27.2%, while Sainsbury’s went up to 14.8%.
Wilko has become the latest casualty of the struggling high street, with all of its 400 stores likely to shut by early October with the loss of more than 12,000 jobs.
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McKevitt said shoppers were making the most of Wilko’s closing sales, with its share of non-food groceries such as toiletries, healthcare and household goods jumping from 1.8% in July to 2.3% in August.
However, Wilko’s sales are down on last year because consumers are going elsewhere. Tesco, Aldi and the bargain stores, such as Poundland, B&M and Home Bargains, have been the biggest winners of customers switching away from Wilko.
