UK supermarket shoppers are increasingly turning to cheaper brands and discount stores as the average household grocery bill is set to rise £454 this year.
Grocery prices climbed another 1.6 percentage points over the past month, according to supermarket till data from Kantar, which was the second highest level of grocery inflation since the research began in 2008.
Price inflation in August is likely to set a new record high, said Kantar’s head of retail and consumer insight, Fraser McKevitt.
Discount stores Lidl and Aldi were the fastest growing supermarkets, with sales up by 13.9% and 11.3% in the past four weeks, with more than 67% of people in Britain having shopped in either one over the past three months.
Both retailers reached a new market share high over the past three months, with Lidl rising to 7.0% of the market and Aldi at 9.1% and further closing in on overtaking struggling Morrisons and becoming the fourth largest grocery in Britain.
As prices rise, McKevitt said, “people are increasingly turning to own-label products to drive down the cost of their weekly shop.
“Supermarkets’ own lines are growing by 4.1% this period, while sales of branded items have fallen by 2.4%.
“It’s a complex picture and the grocers are busy negotiating with their suppliers to mitigate 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.”
Among other retailers, Tesco PLC (LSE:TSCO) returned to growth this period for the first time since October, with sales up 0.1% over the past 12 weeks and its market share staying at 27.1%.
J Sainsbury PLC (LSE:SBRY) saw sales drop 2.2%, leading to its market share easing to 14.9% from 15.2% a year ago, while sales at third-placed Asda fell 2.3% and at Morrisons tumbled 6.7%.
Ocado Retail, the joint venture between Ocado Group PLC (LSE:OCDO) and Marks and Spencer Group PLC (LSE:MKS), increased sales 0.7%, holding its market share steady at 1.8%.