- Overall UK sales up 2.2% in last 12 weeks
- Grocery inflation hits highest since 2008
- Own-brand sales take highest ever market share
The latest grocery market figures from consultancy Kantar Worldpanel are a mixed blessing for shareholders in the supermarket operators.
Although sales in the 12 weeks to 7 August were positive for only the second time this year, the surge in prices of everyday items threatens to add over £500 to the typical annual bill, crimping consumer confidence.
SHOPPING AROUND
According to Kantar, grocery price inflation over the four weeks to 7 August reached 11.6%, its highest level since 2008.
That means the average annual household grocery bill could rise by £530 or more than £10 per week this year compared with last year.
It’s hardly surprising therefore that shoppers are turning to own-label products like never before, with sales up nearly 20% in the last month.
For the first time on record, own-label ranges represent more than half of all grocery items bought in the UK.
Comparisons with customer behaviour during the financial crisis are becoming visible, says Fraser McKevitt, head of retail and consumer insight at Kantar.
‘People are shopping around between the retailers to find the best value products, but back in 2008 there was much more of a reliance on promotions.
‘It’s harder to hunt out these deals in 2022 - the number of products sold on promotion is at 24.7% for the four weeks to 7 August, while 14 years ago it was at 30%.
‘Supermarkets are pointing shoppers towards their everyday low prices, value ranges and price matches instead.’
With customers making more trips to stores the share of online grocery sales has fallen below 12% for the first time since the pandemic, while the high temperatures of the last month have seen sales of perishable goods such as ice cream soar.
WINNERS AND LOSERS
Unsurprisingly, the big winners from the squeeze on shoppers’ wallets are once again the German discounters.
Together, Aldi and Lidl now account for 16.1% of the UK grocery market compared with 14.2% in August last year.
All of the major supermarket groups have suffered a loss of market share compared with this time last year, with Tesco (TSCO) slipping to 26.9% against 27.2%, Sainsburys now 14.8% against 15.2%, Asda 13.9% against 14.2% and Morrisons just 9.3% against 10% previously.
At the margin, Ocado (OCDO) managed to buck the overall decline in online sales with an increase of 6.2% by attracting new shoppers outside its traditional demographic.
Meanwhile, Coop and Iceland, both at the value end of the market, grew their sales by 0.4% and 2.8% respectively.
