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UK grocery inflation hits 9.9%

19 July 2022 By Arabella Mileham

UK grocery inflation has hit 9.9%, the latest data from Kantar has said – the second highest level ever recorded by the retail analysts, with consumers’ supermarket bills rising by £454 a year.

The surge in inflation has largely come off the back of supply chain issues, Kantar said and was likely to continue to rise.

Fraser McKevitt, head of retail and consumer insight at Kantar, said that the grocery prices had jumped by 1.6 percentage points since last month, taking it to the second highest level of grocery inflation that Kantar had seen since it started tracking prices in 2008.

“We’re likely to surpass the previous high come August,” he warned. “All this means that people will be feeling the pinch during our first restriction-free summer since 2019.”

McKevitt noted that own label products were seeing a bump as a result of the inflation, with overall sales of branded groceries down 2.4%, as own-label rose 4.1%, adding that it was “a complex picture”, with grocers looking to negotiate with suppliers to mitigate the impact at the tills as far as possible.

“We’ve seen this play out in the headlines in recent weeks, with some well-known brands temporarily disappearing from supermarket shelves over pricing disputes,” he added.

Market share growth

The fastest growing supermarket in the four week period was Lidl ,which saw sales up by 13.9% in the 12 weeks to 10 July 2022, with Aldi also in double-digit growth of 11.3%, compared with last year. This helped take both discounters to a new market share high, of 7.0% for Lidl and 9.1% for Aldi.

Meanwhile Tesco returned to growth for the first time since October, with sales up 0.1% and retained a market share of 27.1%, with Ocado also seeing growth of 0.7%.

However, Morrisons saw sales down by 6.7% in the 12 weeks to 10 July 2022, with Waitrose also down -6.3%, Asda down -2.3% and Sainsbury’s down -2.2%. The Coop also saw sales down 2%, while the small symbols and independents sector saw sales down by 10.9%.

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