UK grocery inflation hit 5.2% in the four weeks to 13th July, according to Kantar, or Worldpanel by Numerator as it now wants to be known, up from 4.7% in June and 4.1% in May.
With the highest level of food inflation since January 2024, annual grocery bills could jump by £275 as inflation continues to accelerate, the report says.
"Just under two-thirds of households say they are very concerned about the cost of their grocery shopping, and people are adapting their habits to avoid the full impact of price rises," says Fraser McKevitt, head of retail and consumer insight at Worldpanel.
"Own label products, which are often cheaper, continue to be some of the big winners and, in fact, sales of these ranges are again outpacing brands, growing by 5.6% versus 4.9%.
"These inflationary worries aren’t just changing what we buy, but how we prepare it too. We often see people choosing to make simpler meals when they are trying to save money, and today, almost seven in ten dinner plates include fewer than six components."
With budgets under pressure, supermarkets have been finding new ways to pique the interest of consumers, McKevitt adds.
He says innovation is vital for grocers as consumer behaviours and priorities shift, with drinks in particular seeming to be the centre of inspiration this summer, with iced coffee and kombucha drinks examples.
"No and low alcohol drinks continue their gradual march into the mainstream too with nearly seven in every 100 households buying a product this month, pushing sales up by 21%," McKevitt said.
Ocado Retail, the joint venture between Ocado Group PLC (LSE:OCDO) and Marks and Spencer Group PLC (LSE:MKS), enjoyed strongest sales growth of 11.7%, followed by 6.3% for Aldi and 7.1% for Tesco PLC (LSE:TSCO), the fastest rate since December 2023.
Sales at J Sainsbury PLC (LSE:SBRY) increased by 5.3%, putting its market share at 15.1% compared to Tesco's 28.3%.
Asda continued to struggle, with sales down 3%.