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Grocery price inflation hits record 14.7% with ‘no peak in sight’

Grocery price inflation has hit a record 14.7% to add a potential £682 to the annual cost of a basket amid warnings there is still no sign of a peak.

Sales of supermarket own-label products jumped again by 10.3% over the latest four weeks and the cheapest value ranges grew by 42% as shoppers sought to manage their budgets, according to Kantar.

Just over a quarter of households (27%) say they are struggling financially – double the figure recorded last November, the research firm said.

Fraser McKevitt, head of retail and consumer insight at Kantar, said: “Yet again, we have a new record high figure for grocery price inflation and it’s too early right now to call the top.

Market share of UK supermarkets
(PA Graphics)

“Consumers face a £682 jump in their annual grocery bill if they continue to buy the same items, and just over a quarter of all households now say they’re struggling financially, which is double the proportion we recorded last November.

“Nine in 10 of this group say higher food and drink prices are a major concern, second only to energy bills, so it’s clear just how much grocery inflation is hitting people’s wallets and adding to their domestic worries.”

Some consumers found light relief at Halloween, and just over one in 10 households bought a pumpkin in October, although sales were down compared with last year.

Fewer people stocked the cupboards for Christmas in October, preferring to wait until later in the year.

Mr McKevitt said: “This time last year two million consumers had already bought their festive Christmas pudding. We’ve seen 32% fewer shoppers doing that this time around, suggesting people are not trying to spread the cost of their purchasing – at least not in October.”

Aldi was the fastest growing retailer in the latest period, increasing its sales by 22.7% year on year to gain 9.2% market share, while Lidl boosted sales by 21.5% to take its market share to a new record of 7.2%.

Asda again led the traditional Big Four supermarkets with sales growing by 5.3% to maintain an overall market share of 14.3%.

Mr McKevitt said: “With economic forecasters warning of a potential recession, it’s worth reflecting on how much the grocery landscape has changed since the 2008 financial crash.

“We’ve seen a rise in the market share of the discounters Aldi and Lidl, which together now stands at 16.4%, versus 4.4% 14 years ago.”