Despite recent suggestions that cost pressures are easing, latest Kantar data confirms that grocery price inflation remains exceptionally high.
However, it did fall for the second month in a row, inching down from 17.3% to 17.2% for the four weeks to 14 May. Take-home grocery sales rose by 10.8% on the same period as last year, with the discounters continuing to outperform the traditional Big Four supermarkets.
Fraser McKevitt, head of retail and consumer insight at Kantar: “The drop in grocery price inflation, which is down by 0.1 percentage points on last month’s figure, is without doubt welcome news for shoppers but it is still incredibly high – 17.2% is the third fastest rate of grocery inflation we’ve seen since 2008, an extra £833 to annual grocery bills”.
Savvy shoppers are choosing more own-label goods, growing by 15.2% this month, compared to 8.3% for branded. But the brand premium gap is narrowing in most stores via loyalty discounts.
McKevitt continued: “In the fierce contest for market share, eyes have been on the dairy aisle in particular, where the average cost of four pints of milk has come down by 8 pence since last month. Prices are still much higher than they were 12 months ago, at £1.60 currently versus £1.30 last year, but retailers know just how important it is to offer even small savings on staple products like milk to get customers through the door.”
Waitrose benefited from a substantial uplift in the week of the coronation, with sales up 4.8% over the 12 wks, its highest growth since April 2021.
Aldi was the fastest-growing this month, with sales increasing 24.0%. Lidl’s sales rose 23.2%, and together accounted for 17.8% of the market.
Asda won back market share to 13.9% after sales grew 10.6%. Sales were boosted by its Just Essentials range, with nearly two in five Asda baskets containing at least one of these value items this May.
Morrisons recorded a third consecutive period of sales growth, although the increase was more muted versus others at just 0.6%. The grocer relaunched its ‘More Reasons to Shop’ strapline yesterday as part of its efforts to win back shoppers.
Sales increased by 8.9% at Tesco, with growth across its convenience stores, large format supermarket and online channels. Sainsbury’s sales rose by 10.5%, and it held market share steady at 14.8%.
NamNews Implications:
- Inflation of 17.2% is still off-putting for brands…
- …but encouraging for own-label and the discounters.
- i.e. Aldi & Lidl combined share of 17.8%…
- …and growing at 24%.
- And own-label growing a 2x the rate of brands.
- These stats raise two essential questions for branded suppliers:
- How to safely optimise own-label potential?
- How to find ways of optimising Aldi & Lidl traffic?
- These two options are becoming too big to ignore.
- On any count…
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