Annual household food bills are expected to rise by £271 this year as ongoing supply chain issues, Russia’s invasion of Ukraine and increasing raw material costs push food inflation higher.
Shoppers turned to German discounters Aldi and Lidl, which along with Tesco PLC (LSE:TSCO) were the only three ‘top 10’ supermarkets to gain market share in the 12 weeks to 17 April, as budgets were squeezed further.
Grocery prices jumped 5.9% in April compared with the same period last year, which was the biggest increase in over a decade, according to research company Kantar. This is because firms passed on their higher costs to consumers.
Fraser McKevitt, Kantar head of retail and consumer insight, said: "A lot of this is going on non-discretionary, everyday essentials which will prove difficult to cut back on as budgets are squeezed.
“We're seeing a clear flight to value as shoppers watch their pennies."
Aldi, which is the fifth-largest supermarket by market share, grew the most in the period, with its sales advancing 4.2%. Meanwhile, its closest rival Lidl was close behind, having seen revenues hike by 4%.
Tesco, which by definition has monopoly power in the food retailers’ market (over 25% share), rose by 0.3 percentage points to 27.3% of grocery sales. This is some 12 percentage points ahead of second-placed supermarket J Sainsburys PLC.