UK January Grocery-Price Inflation Hits Record High

By Michael Susin

U.K. grocery-price inflation in January reached a new record high following the short-lived signs of consumers' relief at the end of 2022, the latest report by market-research firm Kantar showed.

Grocery inflation for the four-week period to Jan. 22 rose to 16.7%, a 2.3 percentage-point increase from December's level of 14.4%. This is the highest level since the figure started to be tracked in 2008, the report showed.

The increase represents a potential extra 788 pounds ($973.34) on households' annual shopping bills if they don't cut costs, Kantar head of retail and consumer insight Fraser McKevitt said.

As budgets squeeze, supermarkets are intensifying competition to offer value and retain shoppers, driving own-label products growth by 9.3% compared with 1% growth of branded alternatives.

"Across the market, the move is toward 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," McKevitt adds.

German discounter Aldi was the fastest-growing grocer for the fourth consecutive month, with sales 26.9% higher compared with same period last year and reaching a 9.2% market share, while Lidl sales rose by 24.1% and achieved a market share of 7.1%.

"There was little to split Britain's three largest retailers. Sainsbury's sales increased by 6.1%, just 0.1 percentage point higher than Asda and Tesco, giving it 15.4% of the market. Tesco remains the largest British retailer with a 27.5% market share while Asda holds 14.2%. Although its sales fell by 1.9%, Morrisons's performance has continued to improve for the 11th month in a row and its market share now stands at 9.1%," McKevitt said.

For the 12-week period to Jan. 22, grocery inflation now stands at 14.8% with milk, eggs and dog food being the fastest-rising prices. Take-home grocery sales for the same period increased by 7.6%, and 5.7% during the four-week period, Kantar said.

Write to Michael Susin at [e-mail]

(END) Dow Jones Newswires

January 31, 2023 07:25 ET (12:25 GMT)

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