Shoppers face an ‘eye-watering’ increase in the price of groceries

Morrisons has fastest growth in sales

MORRISONS HAS seen the fastest sales growth of the big four grocers while Asda’s recovery is on track at a time when shoppers are having to fork out an extra £133 a year on their shopping due to higher inflation.

The latest Kantar Worldpanel research showed that inflation rose by 3.2 per cent over the past three months, driven by a 20 per cent hike in the price of butter and a 14 per cent increase in the cost of fish.

The data showed that the rising cost of food is the equivalent to people making seven additional shopping trips a year.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “It is a big chunk of money for a lot of people.

“Families spend around £4,000 a year on grocery shopping, but it is an eye-watering increase.”

He said that shoppers are saving money by buying own brand goods rather than branded.

“It links in with what retailers are trying to do – to offer something different when people come into the store,” he said.

Kantar Worldpanel reported the highest sales growth in five years for British supermarkets – up 5 per cent during the 12 weeks to June 18 and a stark contrast to the 0.2 per cent decline seen this time last year, despite the political and economic upheaval of recent weeks.

Supply issues have increased butter and fish prices. A shortage of cream to make butter has raised prices and farmed salmon has been hit by a lice infestation and a fishermen’s strike in Iceland.

“It’s not just salmon. Fish prices have gone up across the board,” said Mr McKevitt.

Recent spates of hot weather have given an early boost to traditional summer categories including ice cream and cider, with respective increases of 12 per cent and 16 per cent adding £58m in sales. Sales are expected to increase further as the data does not include last week’s heatwave.

Morrisons achieved the strongest sales performance of the big four grocers. The Bradford-based retailer increased sales by 3.7 per cent, posting growth for the seventh consecutive period.

“Morrisons is doing own label well and its The Best range won own label range of the year at the recent awards by The Grocer,” said Mr McKevitt.

“It is also building up general merchandise sales.”

Leeds-based Asda’s recent recovery is continuing and sales rose 2.2 per cent.

“Asda is the only retailer where branded products are outpacing own label lines – significant for the grocer given it sells a greater proportion of brands than many of its rivals. 54 per cent of Asda’s sales are branded, well above the market” said Mr McKevitt.

“That isn’t to say Asda’s own label offer is struggling – its Extra Special premium line and recently launched Farm Stores range contributed to a 1.4 per cent increase in private label sales.”

Tesco’s sales grew by 3.5 per cent, its fastest rate since April 2012.

Lidl has pipped Aldi to the title of the UK’s fastest growing supermarket for the first time since March, with sales growth of 18.8 per cent just ahead of Aldi’s 18.7 per cent growth.

Sainsbury’s impressive growth online and in its Local convenience stores, particularly in London, helped increase sales by 3.1 per cent.

Mr McKevitt said the General Election will have very little impact on shopping habits.

“People tend to leave political considerations at the door,” he said.

“What is much more important is economic uncertainty. If the pound goes lower, prices will rise and shoppers could buy more own label or buy products on promotion.”

Grocery prices have been rising since the beginning of January, following a period of grocery price deflation which ran for 30 consecutive periods from September 2014 to December 2016.

Rising prices in markets such as butter, fish and instant coffee have been partially offset by falling prices in ambient cooking sauces and cooked poultry.

Figures from rival analysts Nielsen show shoppers spent 4 per cent more on groceries over the four weeks to June 17. Rising temperatures saw sales of soft drinks rise 9 per cent, alcohol sales rose 7 per cent and ice cream soared 24 per cent. Gin saw a 35 per cent increase, partly due to Father’s Day.

It’s not just salmon. Fish prices have gone up across the board. Fraser McKevitt, head of retail and consumer insight at Kantar Worlfpanel