Shoppers turn to own-label brands as food price inflation surges

On Mar 1, 2022

“Supermarkets with a strong food-on-the-go offer will have enjoyed an added boost that is not reflected in the numbers as people picked up sandwiches, snacks and drinks while out and about again,” Kantar said.

Grocery sales in the 12 weeks to 20 February were down year-on-year but are still ahead of pre-pandemic levels for the time of year.

Figures from market research firm Kantar reveal that supermarket sales fell by 3.7% in the latest period from the year before but were up 8.4% compared to two years earlier. Online sales were down by almost 20% from a year earlier.

Kantar said the year-on-year decline reflects last year’s winter lockdown when the public was eating more meals and snacks at home.

With food price inflation running at 4.3% in February the decline in sales is actually a bit more marked than it might appear at first glance.

“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. Added to this, ongoing supply chain pressures and the potential impact of the conflict in Ukraine are set to continue pushing up prices paid by consumers,” warned Fraser McKevitt, the head of retail and consumer insight at Kantar.

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, McKevitt commented.

“The discounters especially are benefiting from shoppers making more visits to stores. Aldi and Lidl put in strong performances this period and were the fastest-growing retailers, 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,” he added.

Tesco PLC (LSE:TSCO) extended its run of market share gains, increasing its share to 27.7% from 27.4%.

Waitrose also grew ahead of its peers to hold its share of the market flat at 5.0%. J Sainsbury PLC (LSE:SBRY)’s market share slipped to 15.5% from 15.6% a year earlier; Asda’s share declined to 14.6% (14.8%) and Morrisons fell to 9.8% (10.3%).