UK shoppers switch to budget ranges as grocery price inflation hits record high

Discounters Aldi and Lidl benefit as figures reveal annual cost of grocery shop has soared by £682

British shoppers are making a big switch to budget ranges and discount chains as supermarket inflation reached a record high of nearly 15% last month, driving up the average annual bill by £682 a year.

Just over a quarter of all households say they are struggling financially, double the proportion a year ago, as the cost of groceries soared 14.7% in October compared with a year ago. That is the highest level since Kantar, which produces the data, began tracking price changes in 2008.

Fraser McKevitt, the head of retail and consumer insight at Kantar, said: “Yet again, we have a new record high figure for grocery price inflation and it’s too early right now to call the top.”

He said nine in 10 of those concerned about their finances said food and drink prices were a worry, 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”.

Sales of the very cheapest supermarket own-label ranges have risen 42%, although some of that will be down to price increases, while sales of branded goods rose 0.4%, indicating a big fall in the number of items sold after inflation is taken into account.


Discounters Aldi and Lidl are also benefiting from households’ efforts to manage their budget with sales up 22.7% and 21.5% respectively in the three months to the end of October compared with 5.2% growth for the market as a whole. In contrast, Morrisons, Waitrose and independent grocery stores reported sales falls.

McKevitt said there were signs of shoppers reining in spending on non-essentials, with sales of pumpkins for Halloween down on last year. Sales of discounted confectionary also fell.

The muted response to Halloween, now a big event on the UK shopping calendar, could indicate a similar dampener on spending for Christmas.

British shoppers are expected to spend £4.4bn less on non-essentials – a fall of 22% – in the run-up to Christmas as a surge in the cost of living puts a squeeze on their spare cash.

When it comes to festive food and drink, 44% of those questioned said they would be cutting back this year, including turkey and mulled wine, in the latest survey from the debit and credit card company Barclaycard. Two-fifths said they were planning to curb their spending on Christmas parties and socialising. Spending at supermarkets rose 4.6% in October, below the rate of inflation, indicating reductions in the number of items bought or a switch to cut-price ranges.

McKevitt said: “This time last year 2 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.”

Kantar’s findings are at odds with Sainsbury’s take on Christmas shopping. The supermarket said it had moved its festive advertising launch a week early because its customers were spreading the cost of their annual blowout, buying some items earlier than usual.


Sarah Butler

The GuardianTramp

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