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(Alliance News) - UK grocery price inflation spiked to another record high in March, while German discount store Lidl was the fastest growing supermarket, survey results from Kantar showed on Tuesday.
Grocery price inflation hit 17.5% in the 12 weeks to March 19. This added GBP837 to the average household's annual bill, when assuming consumer baskets had stayed the same.
"Unfortunately, it's more bad news for the British public, who are experiencing the ninth month of double-digit grocery price inflation," said Kantar analyst Fraser McKevitt.
"However, shoppers are taking action and clearly hunting around for the best value. Footfall was up in every single grocer this month, with households going to the shops just over four times per week in March. Apart from Christmas, that's the highest frequency we've seen since the start of the pandemic."
Over the 12-week period, grocery price sales rose 8.6% to GBP31.68 billion from GBP29.17 billion a year prior.
German discount supermarkets were notable beneficiaries, as Lidl was the fastest growing supermarket, with sales rising 26% and achieving a market share of 7.4%, compared to a previous 6.4%. Aldi also reached a new record market share of 9.9% from a previous 8.6%, while sales rose 25%.
Asda sales rose 7.3% to GBP4.53 billion from GBP4.23 billion, outperforming 'big 4' competitors Tesco PLC and J Sainsbury PLC, whose sales were both up 6.9%. Tesco remained the UK's largest grocer, however, with its market share edging down to 26.9% from 27.4%, and sales rising to GBP8.53 billion from GBP7.98 billion.
Sainsbury's also saw its market share tick down, to 14.8% from 15.1%, with sales rising to GBP4.69 billion from GBP4.39 billion, while Asda's share slipped to 14.3% from 14.5%. Wm Morrison Supermarkets saw its UK market share continue to fall to 8.8% from 9.5%.
Ocado Group PLC sales continued to improve, rising 7.3% to GBP579 million from GBP539 million, while its market share was flat at 1.8%.
Waitrose's market share declined to 4.5% from 4.8% and Co-op's to 5.7% from 6.0%. Meanwhile, Iceland's share edged up to 2.3% from 2.2%.
Kantar's McKevitt said UK supermarkets joined consumers in the battle against grocery price inflation to maintain their presence, including the use of loyalty card schemes to entice and retain shoppers.
"The supermarkets are also tackling grocery price inflation, battling it out to demonstrate value and get customers through their doors. This is a fiercely competitive sector and if people don't like the prices in one store they will go elsewhere, with consumers visiting three or more of the top 10 retailers in any given month on average," said McKevitt.
"Store cards have emerged as an important way to provide value amid the high cost of living with the grocers offering cheaper prices, coupons and points for people who scan them at the till. Our latest data shows that more than nine in 10 of us have at least one loyalty card in our wallets and usage is on the rise."
Branded goods are being shunned in favour of 'own label' lines, as shoppers look to bring down the cost of their groceries, according to McKevitt.
However, he added: "People are keeping some space in their baskets for the brands they know and love. Outside the discounters Aldi and Lidl, branded goods still make up 52% of the market and sales grew by 7.2% over the past month, the fastest rate we've seen since February 2021. Many brands are innovating and bringing new products to the shelves to maintain their popularity, and 10% of their sales in the last year came from new or updated items."
While availability of fresh fruit and vegetables has been a recent concern on UK supermarket shelves, the latest data from Kantar indicated shoppers did not go without.
"Despite concerns about shortages, the number of baskets containing tomatoes, cucumbers or peppers in the 10 major grocers stayed at 17% in March, the same as February," said McKevitt.
"For any shoppers who couldn't get what they wanted in larger supermarkets, the independents stepped in, with the volumes of tomatoes, peppers and cucumbers in baskets rising by 32%, 26% and 21% respectively in these stores."
Looking ahead, shoppers have already begun thinking about Easter as spring officially arrived March.
"Easter Sunday falls slightly earlier this year and chocolate egg sales are already up 6% in volume terms on last year. The ever-popular hot cross bun is also making its way into shoppers' baskets again, with sales up by 5%," McKevitt said.
Tesco shares were up 1.1% to 254.10 pence each in London on Tuesday morning. Sainsbury's was up 1.3% to 264.80p.
Ocado was up 0.1% to 452.60p.
Ocado also on Tuesday gave an update on its first quarter. In the 13 weeks to February 26, retail revenue was up 3.4% year-on-year to GBP583.7 million, as average selling prices rose 8.3% to GBP2.75. Average customer numbers grew 14% to 951,000, while average basket values edged up 0.2% to GBP124, but average basket sizes fell 7.5% to 45.
Ocado left guidance unchanged from the end of February, expecting mid-single digit growth in revenue, and "marginally" positive earnings before interest, tax, depreciation and amortisation.
By Greg Rosenvinge, Alliance News reporter
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