Kantar reports “clear flight to value” as supermarket shoppers watch their spending and sales fall by almost six per cent in latest 12-week period
Shoppers are seeking out value as grocery inflation hits an 11-year high as total supermarket sales fell by 5.9 per cent in the 12 weeks to 17 April 2022.
For the first time since the pandemic began sales are also in decline by 0.6 per cent compared with two years ago, as the period now includes the start of the first lockdown when only essential shops were allowed to open.
Like-for-like grocery price inflation is at 5.9 per cent this month, its highest level since December 2011.
Fraser McKevitt, head of retail and consumer insight at Kantar, said: “The average household will now be exposed to a potential price increase of £271 per year. 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. The level of products bought on promotion, currently at 27.3 per cent, has decreased 2.7 percentage points as everyday low price strategies come to the fore.
“The major retailers are listening to shoppers’ concerns, with Asda launching its Just Essentials line, Morrisons announcing that it is cutting the price of many everyday goods, and Tesco locking in savings through its Clubcard strategy.”
Aldi was the fastest-growing retailer in the latest period. The grocer’s sales increased by 4.2 per cent over the 12 weeks to 17 April, followed closely by Lidl which was up four per cent.
Fraser McKevitt commented: “Over one million extra shoppers visited Aldi and Lidl respectively over the past 12 weeks compared with this time last year.
“Both retailers achieved record-breaking market shares, with Aldi now holding 8.8 per cent, while Lidl stands at 6.6 per cent. Collectively, the two discounters account for 15.4 per cent of the market – up from just 5.5 per cent a decade ago.”
The war in Ukraine has increased public awareness of supply pressures and there was evidence of some stocking up as consumers prepared for limited availability along with higher prices.
“Last weekend several supermarkets introduced restrictions on cooking oil purchases as concerned consumers filled up their cupboards,” McKevitt explained.
“The combination of rising prices and increased demand saw the cooking oil market grow by 17 per cent over April. Sunflower oil, Britain’s most popular choice for frying, and vegetable oil grew even faster, up by 27 per cent and 40 per cent respectively.”
Despite rising prices, people treated themselves in the lead up to Easter Sunday, which this year fell on 17 April.
“There was still evidence of shoppers making the most of the long Easter weekend and splashing out a little bit more to make it special,” said McKevitt. “Premium own label products performed better than any other lines, with sales jumping by 6.5 per cent.”
This month’s numbers should also be considered in the context of lockdown easing. Sales over the latest four weeks fell by 4.1 per cent as people returned to the office, as well as restaurants and pubs.
“It is to be expected that sales are down compared with last year when restrictions were still in place,” McKevitt explained. “While the number of trips we’re making to the supermarket has remained steady this year, people aren’t buying as much when in store and the average basket size has dropped by 4.5 per cent to £22.39.”
Online grocery sales were down by almost 15 per cent compared with 2021 and over April online’s share dipped by 1.5 percentage points. Half a million fewer households bought over the internet compared with last year.
Aside from the discounters, Tesco was the only other retailer to gain market share during the period, growing by 0.3 percentage points to hold 27.3 per cent of total grocery sales.
Sainsbury’s accounts for 15 per cent of the market, followed by Asda at 14.1 per cent and Morrisons at 9.5 per cent.
Co-op, Waitrose, and Iceland have shares of six per cent, 4.8 per cent, and 2.2 per cent respectively.
Ocado’s share remains steady at 1.8 per cent and its sales were up 13.9 per cent compared with two years ago