Grocery Price Inflation Steady as Consumers Adapt to Market Changes
Stable grocery prices in February raise concerns over future inflation amid evolving shopping habits and supermarket competition.
Grocery prices in the UK remained stable at 3.3% inflation in February 2024, a slight decrease from 3.7% in December 2023. This level of inflation follows the highest reading since March 2023, as reported by analysts.
To retain consumer loyalty amid a competitive market, supermarkets have increased promotional offers, which accounted for 27.6% of all sales, marking an increase of 0.3 percentage points compared to the previous year.
Moreover, premium own-label product sales grew by 13.3% in the same period.
Analysis revealed that households visited an average of just under five different grocery stores in February, which is the lowest figure for that month since 2021. This decline is attributed to the increased use of loyalty schemes that provide discounts to shoppers.
The British Retail Consortium has projected food inflation to reach 4% in the latter half of 2024, influenced by geopolitical tensions and an expected £7 billion rise in costs resulting from the autumn Budget.
Among grocery retailers, Tesco emerged as the largest, holding 28.3% of the market share and achieving sales growth of 5.8%, the highest rate since March 2023. The retailer's ascent has been aided by the introduction of its Clubcard scheme in 1995.
Ocado achieved the fastest growth among retailers for the tenth consecutive month, with a 9.6% increase in sales, maintaining a 1.9% share of the grocery market.
Marks & Spencer also reported gains, with grocery sales rising by 12.2% in its physical stores.
Aldi attracted an additional 377,000 customers, resulting in a market share of 10.3%, supported by a 4.9% rise in sales—the highest since January 2023. Lidl’s market share climbed by 0.3 points to 7.3%, with an 8.1% boost in sales.
Sainsbury’s increased its market presence to 15.7%, while Morrisons holds 8.6%.
Asda, however, experienced a 5% decline compared to the previous year.
As the five-year anniversary of the first Covid lockdown approaches, Kantar’s analysis indicates a shift in consumer behavior, with fewer ingredients being used in meal preparations, reflecting a trend toward simplicity and convenience.
Meal preparation time has decreased significantly, with an average evening prep time dropping from 34 minutes in 2020 to 31 minutes in 2024. Notably, the frequency of snacking has also diminished, with over 330 million fewer 'snacking occasions' recorded in 2024 compared to 2020. Online grocery shopping has also increased its market share to 12.3% this February, up from 8.6% in February 2020, indicating a lasting impact of the pandemic on shopping habits.
To retain consumer loyalty amid a competitive market, supermarkets have increased promotional offers, which accounted for 27.6% of all sales, marking an increase of 0.3 percentage points compared to the previous year.
Moreover, premium own-label product sales grew by 13.3% in the same period.
Analysis revealed that households visited an average of just under five different grocery stores in February, which is the lowest figure for that month since 2021. This decline is attributed to the increased use of loyalty schemes that provide discounts to shoppers.
The British Retail Consortium has projected food inflation to reach 4% in the latter half of 2024, influenced by geopolitical tensions and an expected £7 billion rise in costs resulting from the autumn Budget.
Among grocery retailers, Tesco emerged as the largest, holding 28.3% of the market share and achieving sales growth of 5.8%, the highest rate since March 2023. The retailer's ascent has been aided by the introduction of its Clubcard scheme in 1995.
Ocado achieved the fastest growth among retailers for the tenth consecutive month, with a 9.6% increase in sales, maintaining a 1.9% share of the grocery market.
Marks & Spencer also reported gains, with grocery sales rising by 12.2% in its physical stores.
Aldi attracted an additional 377,000 customers, resulting in a market share of 10.3%, supported by a 4.9% rise in sales—the highest since January 2023. Lidl’s market share climbed by 0.3 points to 7.3%, with an 8.1% boost in sales.
Sainsbury’s increased its market presence to 15.7%, while Morrisons holds 8.6%.
Asda, however, experienced a 5% decline compared to the previous year.
As the five-year anniversary of the first Covid lockdown approaches, Kantar’s analysis indicates a shift in consumer behavior, with fewer ingredients being used in meal preparations, reflecting a trend toward simplicity and convenience.
Meal preparation time has decreased significantly, with an average evening prep time dropping from 34 minutes in 2020 to 31 minutes in 2024. Notably, the frequency of snacking has also diminished, with over 330 million fewer 'snacking occasions' recorded in 2024 compared to 2020. Online grocery shopping has also increased its market share to 12.3% this February, up from 8.6% in February 2020, indicating a lasting impact of the pandemic on shopping habits.
