Take-home grocery figures from Kantar show that supermarket sales fell by 3.8 per cent over the 12 weeks to 23 January 2022.
These year-on-year figures reflect tough comparisons against the high demand of the lockdowns at the start of 2021, with spending remaining 8 per cent higher than pre-pandemic times.
Households in Britain are facing a cost-of-living squeeze and the latest four-week grocery price inflation stands at 3.8 per cent, a 0.3 percentage point rise from December.
Fraser McKevitt, head of retail and consumer insight at Kantar, said: “Prices are rising on many fronts, and the weekly shop is no exception. Like-for-like grocery price inflation, which assumes that shoppers buy exactly the same products this year as they did last year, increased again this month.
'Taken over the course of a 12-month period, this 3.8 per cent rise in prices could add an extra £180 to the average household’s annual grocery bill. We’re now likely to see shoppers striving to keep costs down by searching for cheaper products and promotions. Supermarkets that can offer the best value stand to win the biggest slice of spend.”
These market growth figures do not include on-the-go food and drink purchases, which are likely to be higher than last year. Fraser McKevitt continues: “Increasing confidence about heading out and about, combined with the return to the office, means we’re starting to see pre-pandemic shopping patterns once again.'
Since the first lockdown in March 2020, shoppers have been buying in bulk and visiting the supermarket less often, he said. But basket sizes are now 10 per cent smaller than this time last year, hitting their lowest level since the beginning of the pandemic, while footfall increased by 5 per cent as every major retailer was busier in their stores.
Changing habits were most marked in London, where take-home sales of food and drink decreased by 11 per cent. This suggests that people in the capital were the quickest to embrace eating out in cafés, pubs, and restaurants as many of us returned to city centres.
Increased confidence in visiting stores was also reflected in online grocery sales. Fraser McKevitt explained: “Digital orders accounted for 12.5 per cent of all grocery spend, almost double the pre-pandemic proportion. Though online purchases are down year-on-year by 15 per cent, it’s important to remember that this is in comparison with the strict lockdown we faced in January 2021 when the public was staying indoors when possible.”
This year’s Veganuary and Dry January led to strong results for no- and low-alcohol as well as plant-based products. Fraser McKevitt noted: “After an indulgent Christmas, the new year brought the usual commitment to making healthier choices. Dry January converts pushed up sales of alcohol-free beer by 5 per cent and the numbers for retailer's own-label ranges marketed as healthy were even stronger, increasing by 8 per cent.'
Though fresh fruit, salad and vegetable sales were down compared with last year, plant-based products proved more popular than ever. A record 10.7 million households bought at least one item that was a dairy alternative, a meat substitute or labelled as plant-based this January. Sales growth for these veggie favourites was 0.5 per cent, well above the wider grocery market, he said
Only three retailers recorded year-on-year growth this period, but every single grocer boosted its sales over the last two years. Ocado sales grew by 2.3 per cent over the past 12 weeks, with its share of the grocery market increasing by 0.1 percentage points to 1.8 per cent. That number almost doubles in London specifically, where the grocer accounts for 3.4 per cent of all sales.
Lidl and Aldi recorded simultaneous growth for the first time since June last year. Lidl was the fastest growing physical retailer and increased its sales by 1.2 per cent, boosting its market share by 0.3 percentage points to 6.2 per cent. Aldi gained an additional 1.1 million shoppers over the past 12 weeks, helping its share grow by 0.4 percentage points to 7.8 per cent. The grocer’s sales also rose by 1.1 per cent.
Both Tesco and Waitrose performed ahead of the market over the past 12 weeks and increased share. Tesco’s share moved up from 27.3 per cent last year to 27.9 per cent, marking a full year of market share gains for the retailer. Waitrose saw the greatest footfall increase of any supermarket, helping its share increase by 0.1 percentage points to 5.1 per cent.
Sainsbury’s now holds 15.6 per cent of the market, Asda 14.4 per cent and Morrisons 9.9 per cent. Co-op share stands at 5.7 per cent and Iceland at 2.4 per cent.