Yahoo Finance Cost of groceries reach new highs as Ukraine war set to hike prices even further
Grocery prices reached new highs as inflation hit a nine-year high of 4.3% in February, a survey shows.
Data from market research firm Kantar revealed that UK supermarket sales fell by 3.7% in the 12 weeks to February 2020 from a year ago.
“Apart from the start of the pandemic, when we saw grocers cut promotional deals to maintain availability, this is the fastest rate of inflation we’ve recorded since September 2013,” Fraser McKevitt, head of retail and consumer insight at Kantar, said.
He warned that there could be more pain to come on pricing.
“On top of this, ongoing supply chain pressures and the potential impact of the conflict in Ukraine are set to continue pushing up prices paid by consumers.”
Ukraine and Russia are both big agricultural producers, with the former often dubbed the breadbasket of Europe.
Read more: What Ukraine invasion means for consumer prices in the UK
Russia and Ukraine supply a quarter of the world’s wheat, and half of its sunflower products, such as seeds and oil, while higher gas prices have a knock-on effect on food through fertiliser and transport costs.
Analysts at Rabobank have warned that a full-scale war could impact half of Ukraine’s grains production and double global wheat prices.
Online sales were down by almost 20% year on year over the past month as shoppers are moving beyond the pandemic.
Households spent on average £26.07 less at supermarkets in February and own label sales did better than brands for the first time in three months.
"It's important to flag that the drop in monthly spending isn't all down to savvy budgeting," McKevitt said.
Read more: KitKat maker Nestle to raise prices as inflation set to hit profits
"With the formal end to COVID restrictions in England, more of us are now eating on the go, buying sandwiches, salads and snacks on our lunch breaks, and enjoying meals out with friends and family. That means we're buying less food and drink to have at home."
Aldi and Lidl were the fastest growing UK retailers during the period, both increasing their sales by 3.3%. Aldi attracted an additional 1.3 million customers compared with 2021, while Lidl brought in nearly an extra million.
The UK's biggest supermarket Tesco (TSCO.L) saw sales drop 2.6% year-on-year to £8.62bn. Sainsbury's (SBRY.L) sales fell 4.1% annually to £4.82bn and Asda's fell 5.5% to £4.53bn.
Morrisons saw the biggest decline in February with sales dropping 8.2% to £3.05bn.