UK grocery inflation slows down, yet shoppers feel the heat
The UK is witnessing its slowest rate of grocery inflation this year, but UK shoppers are still feeling the strain, according to data from Kantar.
The inflation rate for groceries fell to 16.5% in the four weeks leading to 11 June 2023, the lowest figure for the year.
However, Fraser McKevitt, Kantar Head of Retail and Consumer Insight, warns that “prices rising at 16.5% isn’t something to celebrate” and highlights that this rate remains the sixth highest monthly figure in the past 15 years.
A growing concern among households, nearly 70% of them are either ‘extremely’ or ‘very worried’ about food and drink inflation, a significant increase from just over two thirds at the beginning of the year. Rising energy bills top the list of financial worries for UK consumers, closely followed by the increase in grocery prices.
In response to inflation, consumers have adjusted their shopping habits. Many are opting for cheaper own label lines, leading to a 41% increase in total spending on these value ranges compared to the previous year. There is also a trend towards simpler dishes with fewer ingredients, with data showing a decrease in oven use and a rise in microwaved meals.
Interestingly, there has been a shift away from the traditional ’round-pound’ pricing. The cost of living crisis has prompted retailers to lean towards £1.25 as an increasingly popular price point, competing with £2, the second most popular grocery item price.
The soaring summer temperatures have sparked an increased demand for products like ice cream and mineral water. However, consumers have been hit by price rises of 20% and 17% respectively on these items. The same trend applies to barbecue staples with sausage prices up by 16% and burgers by 13%.
Discount retailers Aldi and Lidl saw impressive sales growth, with Aldi recording a new record market share of 10.2%. Meanwhile, Morrisons reported modest growth for the fourth consecutive period with its ‘Savers range’ nearly doubling in sales compared to last year.
Helen Dickinson, Chief Executive of the British Retail Consortium, warned against new government policies that could add costs to retailers. She cited current proposals for a deposit return scheme, the ‘Extended Producer Responsibility’ levy, and upcoming increases to business rates as potential hurdles.
Despite these pressures, the general trend of grocery inflation is downward. As the UK continues to grapple with economic pressures and inflation, consumer trends and adaptations provide a compelling narrative of resilience and resourcefulness. Spotted something? Got a story? Send a Facebook Message | A direct message on Twitter | Email: News@Deeside.com