LONDON (Bywire News) - Brits are heading to the discount aisle as grocery inflation hit a ten year high. With prices rising at 5.9% in April, discounted stores such as Aldi and Lidl are reaping the dividends as shoppers abandon the bigger names of Sainsbury’s and Tesco.
According to market researcher, Kantar, prices are rising fastest in markets such as dog food, fresh lamb and savouring snacks, although if you fancy a nice strong drink there is good news. Spirits is one of the few sectors which are falling.
According to their data, the average UK household could potentially be spending an additional £271 every 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,” said Fraser McKevitt, Kantar's head of retail and consumer insight.
Surging prices are seeing UK household incomes getting the biggest squeeze since the 1950s and consumer confidence getting close to record lows. In March, Britain’s inflation hit a 30 year high of 7% with experts predicting it to peak at 9% later this year.
According to Kantar, Aldi saw sales rise by 4.2% year on year for the 12 months to April, closely followed by Lidl at 4%. Between the two of them they saw more than a million extra shoppers compared to the same time last year. They are also hitting their biggest ever market shares with Aldi holding 8.8% and Lidl 6.6%.
Meanwhile, their bigger rivals have been suffering. Overall, grocery sales fell by 5.9%. Tesco’s sales fell by 4.8% with Sainsbury’s, Asda and Morrisons also down by 7.7%, 10.3% and 10.5% respectively. Asda and Morrisons have announced they are cutting the prices of key items.
Kantar’s report also suggests the war in Ukraine may be having an effect, with people showing signs of stockpiling with rising fears of supply chain issues. Sales of sunflower oil and vegetable oil are surging with Tesco among a number of retailers who say they are rationing both products.
(Writing by Tom Cropper, Editing by Cléo Celeste)