UK grocery price inflation hit a record 16.7% in the 4 weeks to 22 January 2023 according to fresh industry data.
Households face an extra £788 on their annual shopping bills if they don’t change their behaviour to cut costs, said Kantar, which compiled the data.
The level of inflation compared to 14.4% in December's report, 14.6% in November and 14.7% in October, which had indicated that price increases were starting to slow.
Prices are surging most in products such as milk, eggs and dog food, according to the research, which compares prices on more than 75,000 identical products.
Fraser McKevitt, head of retail and consumer insight at Kantar, commented: “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.”
“Grocery price inflation jumped a staggering 2.3 percentage points this month to 16.7%, flying past the previous high we recorded in October 2022.”
McKevitt continued: “Competition in the British grocery sector is as intense as it’s ever been as retailers strive to retain shoppers.”
“The grocers have been doing this by boosting their own-label ranges especially, with sales of these lines growing consistently over the past nine months.
“January was no exception as own-label lines grew by 9.3%, well ahead of branded alternatives which were up by just 1.0%.
“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.”
Aldi was the fastest growing grocer for the fourth month in a row this period, with sales 26.9% higher year on year. It now holds 9.2% of the market. Lidl’s sales jumped by 24.1%, putting its market share at 7.1%.
The largest three supermarkets showed similar levels of growth. Sales at J Sainsbury PLC (LSE:SBRY) increased by 6.1%, just 0.1 of a percentage point higher than Asda and Tesco, giving it 15.4% of the market. Tesco PLC (LSE:TSCO) grew sales 6% and remains the largest British retailer with a 27.5% market share while Asda grew 6.1% and holds a 14.2% share.
Although its sales fell by 1.9%, Wm Morrison Supermarkets’ performance has continued to improve for the eleventh month in a row and its market share now stands at 9.1%.
Iceland’s share increased by 0.1 percentage point to 2.5%, driven by an annual sales rise of 10.6%. Ocado Retail, the joint venture between Ocado Group PLC (LSE:OCDO) and Marks and Spencer Group PLC (LSE:MKS), matched the market’s growth rate at 7.6%, well above overall online sales which were down 0.7%.
Convenience specialist Co-op has a 5.5% share of the market and Waitrose accounts for 4.7% of total sales.