Tuesday 4 April 2017

UK Households Paying £21.31 Extras For Food In 2017 Because Of Inflation


New industry figures from Kantar Worldpanel show the price of everyday goods has risen by 2.3% compared to this time last year, reflecting wider inflation levels in the UK.

And this looks set to continue, with the Bank of England expecting inflation to climb to around 2.8% by the end of the year and some analysts predicting it could even breach the 3% mark.

The weakness in sterling following the Brexit vote has led to increased costs for producers, distributors and often the supermarkets themselves, and these hikes are being passed on to the consumer through higher prices or the reduction in size of some products.

With wage growth unlikely to keep pace with the hike in costs, families may be looking for cheaper alternatives during the weekly shop, a trend which is already emerging; own-branded products have taken 5% of market share from their branded rivals during the past 12 weeks.

This sentiment is also reflected in statistics from consumer research company Neilsen, which found that just over a quarter of the money spent at UK supermarkets so far this year went on cut-price products or multi-buy offers - the lowest levels since 2006.

"The level of promotional spend has gone back to levels not seen since before the 2008/09 economic crisis," said Mike Watkins, Nielsen's UK head of retailer and business insight.

"There's also been a shift away from multi-buy to simpler price cuts, which is in tune with shopper needs to make it easier to manage their basket spend."

In terms of the performance of individual retailers, Lidl and Aldi are continuing their march forward and both reached their highest ever market shares during the beginning of the year, now holding a combined share of 11.7% of the grocery sector.

Lidl was top of the table in terms of sales growth with a 15% boost, while Aldi saw a 14.3% increase over the three-month period.

Tesco, Sainsbury's and Asda all lost a small amount of their market share and saw a drop in sales compared to last year, but this has likely been affected by the fact that Easter is scheduled later this year compared to 2016.



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