Grocery price inflation in the UK has hit a fresh record high of 16.7%, adding nearly £800 to the typical annual shopping bill, with the price of milk, eggs and dog food rising fastest.
Inflation reached the new record in the four weeks to 22 January, according to retail analysts Kantar, the highest since it started tracking it in 2008. It was up sharply from December’s figure of 14.4%, which lifted Christmas spending to a record £12.8bn, and beat the previous record set in October. The latest increase will take the average annual food shopping bill to £5,504, up £788, Kantar said.
The monthly report also showed that no- and low-alcohol beer sales volumes rose 3% year on year, as many people embraced dry January. Veganuary also made an impact, as sales of supermarket own-label ranges labelled as plant-based or vegan jumped by 21%.
Grocery sales overall rose 5.7% year on year during the four-week period, and by 7.6% over the 12 weeks to 22 January.
Fraser McKevitt, the head of retail and consumer insight at Kantar, said: “Late last year, we saw the rate of grocery price inflation dip slightly, but that small sign of relief for consumers has been short-lived. Households will now face an extra £788 on their annual shopping bills if they don’t change their behaviour to cut costs.”
Amid record inflation, supermarkets have expanded their own-label ranges to offer customers value. Sales of own-label products grew by 9.3% in January, while branded alternatives were up only 1%.
McKevitt said: “Across the market the move is towards everyday low pricing, with many supermarkets offering price matching and using their loyalty schemes to help shoppers save. As a result of this push, the proportion of spending on promotions has fallen to its lowest level since at least 2008 this month, exaggerating the usual post-Christmas drop-off in deals.”
Turning to plant-based or vegan products, growth was largely driven by existing shoppers rather than new converts, he said, with 3.4 million consumers making a purchase this January, which is slightly down on last year. New regulations on food and drink that is high in sugar, salt and fat could also be having an impact, as £10m less was spent on chocolate deals this January compared with last year.
The German discounter Aldi was the fastest growing grocer for the fourth month in a row, with sales 26.9% higher year on year, giving it a 9.2% slice of the market. Lidl’s sales jumped by 24.1%, putting its market share at 7.1%. Their bigger rivals Tesco, Sainsbury’s and Asda increased their sales by about 6%, while Morrisons sales dropped 1.9%.
