UK supermarket price inflation hits record high, adding £788 to annual bills

Milk, eggs and dog food were grocery items with fastest price rises, figures from Kantar show

Britain’s retailers have said shop price inflation has yet to peak this year, with the cost of basic essentials expected to remain high, after figures showed grocery prices accelerating at the fastest rate on record.

The British Retail Consortium said the price of food and drink, clothing and other items sold in shops and online would continue to rise at a rapid pace, even if the UK’s official inflation rate for all goods and services fades over the coming months.

Helen Dickinson, the chief executive of the BRC, said: “As retailers still face ongoing headwinds from rising energy bills and labour shortages, prices are yet to peak and will likely remain high in the near term as a result.”

She said a fall in the global price of oil and food from higher levels last year would help to see some inflationary pressures easing.

The UK’s official inflation rate – which measures annual price growth in retail but also more widely in restaurant meals, energy bills, and haircuts – has fallen back from a peak of 11.1% in October to just over 10% in December.

Nevertheless, food price inflation in particular has soared as producers pass on the cost of higher energy bills and raw materials. The BRC flagged big rises in sugar and alcohol in the past month, as well as fruit and vegetables.

It comes after figures from the retail analysts Kantar showed grocery price inflation in the UK hit a fresh record high of 16.7% in the four weeks to 22 January, adding nearly £800 to the typical annual shopping bill, with the price of milk, eggs and dog food rising fastest.

The figure was up from 14.4% in December, and has reached the highest level since Kantar began tracking the figures in 2008. The latest increase will take the average annual food shopping bill to £5,504, up £788.

The monthly report also showed that no- and low-alcohol beer sales volumes rose 3% year on year, as many people embraced dry January. Veganuary also made an impact, as sales of supermarket own-label ranges labelled as plant-based or vegan jumped by 21%.

Grocery sales overall rose 5.7% year on year during the four-week period, and by 7.6% over the 12 weeks to 22 January.

Fraser McKevitt, the head of retail and consumer insight at Kantar, said: “Late last year, we saw the rate of grocery price inflation dip slightly, but that small sign of relief for consumers has been short-lived. Households will now face an extra £788 on their annual shopping bills if they don’t change their behaviour to cut costs.”

Amid record inflation, supermarkets have expanded their own-label ranges to offer customers value. Sales of own-label products grew by 9.3% in January, while branded alternatives were up only 1%.

McKevitt said: “Across the market the move is towards 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.”

The German discounter Aldi was the fastest growing grocer for the fourth month in a row, with sales 26.9% higher year on year, giving it a 9.2% slice of the market. Lidl’s sales jumped by 24.1%, putting its market share at 7.1%.

Their bigger rivals Tesco, Sainsbury’s and Asda increased their sales by about 6%, while Morrisons sales dropped 1.9%.


Julia Kollewe and Richard Partington

The GuardianTramp

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