Scramble for value ranges as grocery inflation hits highest level since 2009
Industry data shows that shoppers are increasingly turning towards cheaper goods in supermarkets as the cost of living crisis forces up prices in-store and across the economy more generally.
Demand for supermarket value ranges has surged by 12% as grocery inflation hits its highest level in 13 years, according to closely-watched industry data.
Kantar Worldpanel reported that like-for-like grocery prices rose by an annual rate of 8.3% over the four weeks to 12 June, up 1.3 percentage points on the previous period.
It warned that the leap in prices, amid the wider cost of living crisis, meant that households were facing the prospect of paying £380 more for their shopping on an annual basis as supermarkets and their supply chains face up to mounting costs from things such as energy and fuel.
It represented a rise of more than £100 on the extra sum families were paying in April, Kantar said.
The rising cost of food and other supermarket goods are expected to be reflected in the inflation figures for May, due to be released by the Office for National Statistics on Wednesday.
Economists polled by the Reuters news agency expect a slight tick up in the annual rate from 9% to 9.1%, which would still result in a fresh 40-year high.
Supermarket sales have largely been declining this year amid tough comparisons with coronavirus restrictions in 2021 that maintained high demand for grocery sales following the first lockdowns of 2020.
Over the latest four weeks, sales grew by 0.4% versus the same period in 2021.
The report put some of that growth down to families and friends getting together in large numbers over the Queen’s Platinum Jubilee Bank Holiday weekend.
Fraser McKevitt, head of retail and consumer insight at Kantar, said: “Even with grocery inflation at a decade-long high, sales during the week of the Platinum Jubilee (to 5 June) were £87m higher than on average in 2022.
He said, however that the inflationary pressures facing households continued to drive more people towards the arms of the discount brands, with Lidl leading the way in terms of growth in market share.
“We can also see consumers turning to value ranges, such as ASDA Smart Price, Co-op Honest Value and Sainsbury’s Imperfectly Tasty, to save money and together all value own-label lines grew by 12.0%.”