Grocery Price Inflation Continues To Accelerate; Lidl Reaches Record Market Share

Latest figures from Worldpanel by Numerator: UK take-home sales up 5.4% during the 4 weeks to 13 July compared to 2024 (accelerating price inflation, with the highest level since January 2024 at 5.2%).

The average household spends £5,283 each year at supermarkets, which means the latest rise could add £275 to people’s grocery bills if their shopping habits stay the same.

Fraser McKevitt, head of retail and consumer insight: “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%."

Inflationary worries are not only changing what we buy food but also its preparation (simpler meals to save money, almost seven in ten dinner plates include fewer than six components).

McKevitt said: “Innovation is absolutely vital to help grocers keep up with new trends and make sure they’re meeting shoppers’ needs as behaviours and priorities shift."

The drinks aisle:
Iced coffee has soared in popularity in recent years, and with summer temperatures rising, sales were up this month by 81%.

Kombucha drinks sales more than doubling over the latest four weeks vs 2024. 

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%.

Individual retailers:
Lidl reached a record high market share this period at 8.3%, gaining 0.5 percentage points as it attracted more than half a million new customers to its stores.

Aldi sales up 6.3%, share up to 10.9%.

Tesco share 28.3% after sales grew by 7.1%, the fastest rate since December 2023.

Sales at Sainsbury’s increased by 5.3%, raising its market share to 15.1%.

Matching its previous share high of 2.0%, Ocado was again the fastest-growing grocer in the UK. Its sales rose by 11.7%, exceeding the overall online market growth rate of 5.7%.

Over the past 12 weeks, online accounted for 12.0% of all sales at the grocers, with 23% of households making at least one virtual shopping trip.

Meanwhile, grocery sales at M&S were 6.5% higher than a year ago.

Spending through the tills at Morrisons nudged up just 1.0%, with its market share falling to 8.4%.

Despite its turnaround efforts, Asda’s share of the market slipped to 11.8% after a 3.0% fall in sales.

NamNews Implications:

• Consumers are patently being affected by the 5.2% inflation ‘peak’ (and more to come)…
• …in terms of more savvy food spending and eating carefully to conserve cash.
• Temporary moves (like brand to own label equivalents)…
• …may prove difficult/expensive for suppliers to reverse.
• Innovation in some categories may help.
• Lidl continues to find top of mind for retailers and suppliers (raising questions re their role in trade strategies?)
• Meanwhile, the discounters’ joint share of 19.2%…
• …if not raising concerns, should be.
• By the same token, the falling shares of Morrisons and Asda cast a shadow…

Tesco Sees Jump In Market Share As Consumers Shop Little And Often Amid Rising Temperatures And Prices

Kantar Latest: Grocery footfall a five-year high (4 weeks to 15 June), take-home sales up 4.1% vs 2024, jump in shopping frequency despite grocery price inflation 4.7% highest since February 2024, vs previous month 4.1%

Fraser McKevitt, head of retail and consumer insight at Kantar: “Higher prices didn’t stop shoppers making 490 million trips to the supermarket over the latest month, averaging almost 17 per British household. That’s the highest we’ve recorded since March 2020.” 

However, the rise in frequency was balanced out by a drop in average trip spend (down by three pence to £23.89).

McKevitt added: “Consumer concerns over price are continuing, and this is reflected in the figures. Sales of own-label ranges grew at 4.2% this month, ahead of branded lines, as shoppers looked to balance their budgets. Deals also remain an important tool for retailers to offer value, and the proportion of spending on promotion stepped up to 28.8% this period.”

Overall grocery volumes fell 0.4% in the last 4 weeks, the first year-on-year decline this year. Kantar suggested that a small part of this fall could be down to changing health priorities, including growing use of GLP-1 weight loss drugs (4 in 100 UK households in Great Britain now include at least one GLP-1 user, almost twice vs 2024). Four in five of the users Kantar surveyed say they plan to eat fewer chocolates and crisps, nearly 3 in 4 intend to cut back on biscuits.

Ocado was the fastest-growing grocer again, sales up 12.2% in 12 weeks to 15 June 2025 (more frequent visits to its website, strong performance in London and Southern England, market share 1.9%).

Traditional grocers:
Lidl was fastest growing at 11.2% (3rd consecutive month double-digit) - share 8.1%
Aldi share 10.9%, sales up 6.5%.
Tesco sales up 7.0%, share 28.1%.
Sainsbury’s share 15.2%, sales up 5.7%.
Morrisons’ grocery share slipped to 8.4% after spending in its stores only up 2.2%.
Asda’s share fell to 11.9%, till-sales down 1.7% vs the same period 2024, albeit an improving trend with growth expected to return over the summer months.
Waitrose sales up 5.5% – its best result since March 2021.
M&S grocery sales up 12.0% (cyber attack recovery)

NamNews Implications:

• The jump in shopping frequency (‘highest Kantar recorded since March 2020’) could also be a reflection of the tendency to shop around.
• Switching to own-label equivalents (sales up 4.2%) continues…
• …carrying with it the risk that ‘satisfied’ switchers might stick with the habit…
• …given the smaller-than-expected compromise.
• Lidl (sales up 11.2%) and Aldi (sales up 6.5%) now have a combined share of 19.0% (!).
• Tesco powers on (sales up 7%, share 28.1%) and Sainsbury’s (sales up 5.7%, share 15.2%)
• i.e. Tesco-Sainsbury’s and Aldi-Lidl have a combined share of 62.3%…
• …surely representing a continuing threat to Morrisons and Asda’s recovery ambitions.
• Maybe time for suppliers to rebalance retailer trading priorities?

Strong Period For Discounters Amid Rising Grocery Price Inflation; Signs Of Improvement At Asda

Latest figures from Kantar show take-home grocery sales grew by 4.4% over the four weeks to 18th May, with more shoppers heading to the discounters and buying own label goods as inflation in the sector reached its highest level since February 2024.

Grocery price inflation now stands at 4.1%, compared to 3.8% the previous month, amid rising cost pressures for retailers and manufacturers linked to increased Employer National Insurance contributions and National Living Wage.

“This latest jump in grocery price inflation takes us into new territory for 2025,” said Fraser McKevitt, head of retail and consumer insight at Kantar.

“Households have been adapting their buying habits to manage budgets for some time, but we typically see changes in behaviour once inflation tips beyond the 3% to 4% point, as people notice the impact on their wallets more. Own label lines are ones to watch, with premium own label, in particular, being the fastest growing part of the market since September 2023.”

Squeezed consumers are also continuing to seek out promotions, with McKevitt commenting: “The growth of spending on deals has carried on this month, increasing by 5.1% versus May last year. Trimming prices remains the most popular way for retailers to draw in customers, with 80% of promotional spending this period down to straightforward price cuts.”

Looking at the performance of individual retailers, Ocado marked a full year as the UK’s fastest-growing grocer, with its sales climbing 14.9% over the 12 weeks to 18 May.

It was also a good period for the discounters, which achieved their strongest combined growth since January 2024 at 8.4%. Lidl reached a new share high of 8.1% after seeing its sales grow 10.9%. Compared with the same period last year, it attracted 419,000 extra shoppers through its doors – the most of any retailer. Aldi’s hold of the market reached a record high at 11.1%, with sales up by 6.7% – its fastest growth rate since the start of last year.

Tesco’s sales rose by 5.9%, driving its market share up 0.4 percentage points to 28.0%. Sales at Sainsbury’s accelerated by 4.7%, giving it a 15.1% share. Sales at Morrisons nudged up 1.1%, but its share slipped to 8.4%.

Meanwhile, Asda saw its best performance since May 2024 as it continued with its Rollback campaign. Its sales still slipped 3.2%, but this was an improvement on the 5%-plus declines recorded over much of the last year.

Despite grappling with a major cyber attack on its systems, spending on groceries at M&S rose by 12.3%.

NamNews Implications:

• The discounter opportunity leaps out (or should!).
• i.e. See yesterday’s Lidl-Schwarz piece in NamNews
• NB. In 2023, Aldi achieved a global turnover of €112bn and Schwarz (owner of Lidl) saw its sales hit €175bn last year…
• …compared to Tesco’s global sales of €78bn.
• i.e. The discounters have the option of subsidising share growth at local level…
• Meanwhile, with inflation at 4.1% (and consumer-in-street perception of ‘real’ ‘pound-in-pocket’ inflation even greater)…
• …there are short-term moves into own label and discounters for value by cash-strapped consumers….
• …where they find the compromises they were led to expect by brands and mults advertising was not as great in practice…
• …may become set in place and increasingly expensive to reverse.
• Especially as packaging taxes have yet to emerge and impact inflation levels, inevitably…

Supermarkets Fastest Growth In Five Months - Source & Impact?

Taking the latest results from Nielsen and Kantar, it is encouraging that some of the mults appear to be coming back (possibly at the expense of other multiples?)…no-one ever wanted these guys to fail, and besides so much of the supplier business model is built upon growth and the mults having a major slice of the action.

However, brand-owners might usefully think about the split between brand and private label of the market data. Add to this the high rate of discounter market share growth, again at the relative expense of brands’ demand and a different picture of recovery emerges..

All pointing to the fact that brand premia are being eroded, hopefully triggering a return to basics, real basics, by the realists…