Grocery take-home sales increased 3.8% in the 12 weeks to September 4, 2022, according to our latest figures. This is the third consecutive month that sales in the sector have grown after more than a year of decline as a result of comparisons with the pandemic. The increase comes as grocery price inflation reached 12.4% over the past month, a new record according to our data.
It appears that there is no end in sight for grocery inflation as the rate at which food and beverage prices rise continues to accelerate. Now down 12.4% in August, the latest figure means the average annual grocery bill will jump from £4,610 to £5,181 if consumers don’t make changes to what they buy and how they shop to cut costs. That’s an extra £572 a year. Categories such as milk, butter, and dog food are increasing particularly rapidly at 31%, 25%, and 29%, respectively.
In what is a fiercely competitive sector, supermarkets are reacting to ensure that they recognize the challenges faced by consumers and offer the best value, in particular by expanding their own brand ranges. Their efforts appear to be welcomed by consumers with sales of the cheapest value private label products up 33% in this period compared to a year ago and nearly one in four baskets contains one of these lines. Total spend across all own-brand lines by retailers was £393m higher over the past four weeks, taking own-brand market share to 51.1%.
Four grand, no more
Shoppers are taking steps to manage their budgets, including expanding the range of stores they visit, benefiting discounters. Aldi’s sales rose by 18.7% over the 12 weeks to 4 September 2022, reaching a 9.3% market share and making it Britain’s fourth largest supermarket for the first time. For its part, Lidl increased its sales by 20.9% and its market share increased to 7.1%.
In the early 2010s, Tesco, Sainsbury’s, Asda and Morrisons together accounted for more than three-quarters of the industry, but the traditional Big Four are no more. Discount stores have seen dramatic increases in sales in recent months, drawing more and more customers through their doors. Aldi has done well to expand its shopper base, supported by steady store openings and with 14.2 million consumers visiting the grocery store in the last three months. Meanwhile, for the fourth month in a row, Lidl was the fastest growing grocery store and posted its best sales performance since October 2014.
Back to school
Even with prices rising, parents had to prepare for the end of summer break as most schools returned in early September. In the week before schools reopened, through September 4, 2022, parents were clearly stocking up and preparing for the return of the traditional grab-and-go lunch. Sales of sliced bread increased by 12% compared to the previous three weeks, while cheese snacks grew by 18% and children’s yogurts by 57%.
Iceland gained market share in the last period and its sales are 5.8% higher than in 2021. Tesco, Sainsbury’s and Asda achieved their best sales performance since April 2021. Tesco’s market share is now 26 .9% after a 1.9% increase in sales. while Asda currently holds 14.1% of the market after sales growth of 2.2%. Sainsbury’s represents 14.6% of the market.
Co-op maintained its 6.5% market share and secured a 2.7% increase in sales. Morrisons has 9.1% of the market, Waitrose has an overall 4.7% share and online grocery specialist Ocado has 1.7% of the market.