UK grocery price inflation hits record 14.7% and still too early to call the ceiling

Grocery inflation hit 14.7% in October, another new record, and it is still ‘too early to call the ceiling’, market researcher Kantar has said today.

Consumers face a £682 jump in their annual grocery bill if they continue to buy the same items.

Cash-strapped households are turning and own-label ranges and discount stores such as Lidl and Aldi in a bid to manage household budgets

Just over a quarter of all households [27%] now say they’re struggling financially, which is double the proportion recorded last November, according to Kantar.

Higher food and drink prices are a major concern, second only to energy bills, “so it’s clear just how much grocery inflation is hitting people’s wallets and adding to their domestic worries.” Kanter has said.

Sales of own-label products have jumped again by 10.3% over the latest four weeks, “as shoppers adopt different strategies to manage their budgets.”

The branded goods market grew far slower at 0.4%.

Kanter said: “Food and drink spending is generally non-discretionary so it’s not easy for shoppers to cut back the amount they buy.”

“Many are looking to reduce costs in other ways and the big shift to own label is still accelerating.”

“While some of the rise will be down to price inflation, we can clearly see the trend in sales of the very cheapest value own label ranges, which are up by a whopping 42%. ” Kanter has said.

“These items currently represent just under 3% of the market, although retailers have been adding new products in recent months, so it will be interesting to see if this continues.”

Kanter has noted that fewer people are stocking the cupboards for Christmas in October, instead preferring to wait until later in the year.

“This time last year two million consumers had already bought their festive Christmas pudding.”

“We’ve seen 32% fewer shoppers doing that this time around, suggesting people are not trying to spread the cost of their purchasing – at least not in October.”

Aldi was the fastest growing retailer in the latest period, increasing its sales by 22.7% year on year to now hold a 9.2% market share.

Lidl boosted sales by 21.5% to take its market share to a new record high of 7.2%.

“With economic forecasters warning of a potential recession, it’s worth reflecting on how much the grocery landscape has changed since the 2008 financial crash.”

“We’ve seen a rise in the market share of the discounters Aldi and Lidl, which together now stands at 16.4%, versus 4.4% 14 years ago.” Kantar said.

Sue Davies, Head of Food Policy, at consumer group Which? said: “The rocketing price of food is a real concern with millions of people skipping meals or struggling to put healthy meals on the table.”

“It is essential that households get the support they need from the government and businesses amid the cost of living crisis.”

“Supermarkets must ensure budget lines for healthy and affordable essential items are widely available across their stores.”

“Promotions should be targeted at those most in need and people supported so they can easily compare the price of products to get the best value.”