Grocery price inflation has seen a slight increase as shoppers are turning to promoted items to manage their budgets, according to recent analysis. Data from analysts Kantar reveals that supermarket prices are now 2% higher than they were a year ago, up from 1.7% in August.
In response to rising prices, households have increased their purchases of promoted items by 7.4% in September, while sales of full-priced items only saw a minimal rise of 0.3%. Overall take-home sales across various grocers have increased by 2% during the same period.
The analysis by Kantar also highlights that prices are rising most notably in markets such as chilled soft drinks, chocolate confectionery, and skincare products. Interestingly, the average amount spent on toilet and kitchen roll has decreased by 6% compared to last year, while dog and cat food prices have dropped by 4% and 3% respectively.
Fraser McKevitt, head of retail and consumer insight at Kantar, noted that in the competitive retail sector, supermarkets are making efforts to control costs for consumers, leading to price decreases in certain product categories.
The change in weather patterns in September influenced consumer behaviour, with sales of hot chocolate rising by 28%, soup by 10%, and home baking products by 7%. Additionally, Halloween pumpkin sales nearly doubled compared to the previous September.
As financial strains persist, more consumers are finding it challenging to balance their environmental concerns with financial worries. A survey conducted for Kantar revealed that 59% of Britons are finding it increasingly difficult to act sustainably, up from 44% the previous year.
In terms of market share, Tesco saw its largest annual share increase since December 2017, climbing to 28% from 27.4% a year earlier. Online retailer Ocado maintained its position as the fastest-growing grocer for the eighth consecutive month, with sales rising by 10% over the past 12 weeks.
Among discounters, Lidl experienced an 8.8% increase in spending, boosting its market share to 8.1%. Aldi also saw growth, capturing 9.8% of the market’s spending.
Overall, the grocery landscape continues to evolve as both retailers and consumers navigate the challenges posed by changing economic conditions and consumer preferences.