Grocery bills will soar by £271 this year

Grocery bills will soar by £271 this year: Cost of dog food, fresh lamb and savoury snacks are rising the fastest in UK supermarkets as food price inflation hits its highest rate for 11 YEARS

  • Data from market researcher Kantar showed that overall grocery price inflation hit 5.9 per cent this month
  • It is the fastest rise since December 2011 as the number of items on promotion at supermarkets decreased
  • Prices in UK are rising fastest in dog food, fresh lamb and savoury snacks, although they are falling in spirits
  • Aldi is the fastest growing retailer in Britain with its sales up 4.2 per cent, while Lidl saw a 4 per cent rise 

The price of groceries in Britain is now increasing at its fastest rate in 11 years, adding an extra £271 to the amount average households will pay at the till this year as more shoppers switch to budget retailers Lidl and Aldi.

Data from market researcher Kantar showed that overall grocery price inflation hit 5.9 per cent this month in what is the fastest rise since December 2011 as the number of items on promotion at supermarkets decreased.

Prices are rising fastest in products such as dog and cat food, fresh lamb and beef, savoury snacks and crisps but  they are falling in spirits – as surging prices cause the biggest squeeze on UK household incomes since the 1950s. Other products rising most rapidly include frozen potato-based products, canned colas, fresh poultry and milk.

Aldi is the fastest growing retailer, with its sales up 4.2 per cent, while Lidl saw a 4 per cent rise. More than one million extra shoppers visited the German discounters over the past 12 weeks compared with this time last year.

Both achieved record-breaking market shares, with Aldi at 8.8 per cent and Lidl at 6.6 per cent. They are both still opening new stores and hold a combined 15.4 per cent market share – up from just 5.5 per cent ten years ago.

Kantar said prices are rising fastest in markets such as dog food, fresh lamb and savoury snacks. Here, MailOnline looks at the price of dog food (meat chunks in jelly, 6x400g); a leg of lamb (per kg); and a multipack of ready salted crisps (6x25g)

* Kantar said the ‘change versus two years ago’ figure is provided to give further context to the year-on-year growth figures, which are now comparing against the accelerated take-home sales recorded during the Covid-19 pandemic

Fraser McKevitt, head of retail and consumer insight at Kantar, said: ‘The average household will now be exposed to a potential price increase of £271 per year. 

‘A lot of this is going on non-discretionary, everyday essentials, which will prove difficult to cut back on as budgets are squeezed. We’re seeing a clear flight to value as shoppers watch their pennies. 

Supermarkets slash hundreds of prices: Asda and Morrisons reduce price of tea bags, eggs, meat and cereal by up to 13% on average

Supermarkets are slashing the prices of hundreds of products as customers face a cost-of-living crisis – with Asda and Morrisons reducing the cost of tea bags, eggs, meat and cereal by up to 13 per cent on average.

As part of plans to invest £73 million and supports its staff, Asda is also increasing the hourly rate of shop floor workers to £10.10 from July.

In total, the supermarket giant is slashing the prices of more than 100 of its most popular items, including cheddar cheese and rice, as part of the measures.

It comes a week after the company said it will axe its Smart Price range and replace it with new Just Essentials by Asda products – a move it says comprises of a wider range of products.

Morrisons, meanwhile, also announced that it is cutting the price of around 500 items. The UK’s fourth-largest supermarket said it has lowered the cost of products including beef and nappies, as well as refrigerated, frozen and store cupboard food – accounting for around six per cent of its total volume of sales.

Morrisons chief executive David Potts said the price drops would make a noticeable difference to consumers. A 30-pack of own-brand eggs will sell for £2.99 instead of the previous £3.40, while a pack of paracetamol will cost 29p, down from 65p.

Shoppers can also buy a 430g pack of Morrisons British diced beef for £3.99, rather than £3.59, and a 33-pack of Nutmeg-brand nappies for £1.29, down from £1.40.

More than 180 additional products have also been included in new promotions such as ‘buy two for £1.80’ on cereals, ‘buy two for £3’ on breaded chicken and ‘buy two for £5’ on ready meals.

‘The level of products bought on promotion, currently at 27.3 per cent, has decreased 2.7 percentage points as everyday low price strategies come to the fore.’

Campaigner Jack Monroe recently criticised supermarkets for taking their cheapest everyday items off shelves.

She argued that inflation – which tracks the cost of the same items over time – is an imperfect way of measuring how much prices are increasing because the cheapest products are no longer available.

Mr McKevitt said supermarkets have been listening, with Asda, Morrisons and Tesco all taking steps to offer cheaper food to customers. 

Kantar found that supermarket sales dropped 5.9 per cent over the 12 weeks to April 17.

Sales are also, for the first time since the pandemic started, 0.6 per cent below where they were two years ago. This period now takes into account the early days of the first lockdown.

While Tesco’s sales fell 4.8 per cent year-on-year, sales at Sainsbury’s, Asda and Morrisons were down 7.7 per cent, 10.3 per cent and 10.5 per cent respectively.

Speaking about the budget supermarkets, Mr McKevitt added: ‘Over one million extra shoppers visited Aldi and Lidl respectively over the past 12 weeks compared with this time last year.

‘Both retailers achieved record-breaking market shares, with Aldi now holding 8.8 per cent while Lidl stands at 6.6 per cent. Collectively, the two discounters account for 15.4 per cent of the market – up from just 5.5 per cent a decade ago.’

Tesco was the only other retailer whose market share grew over the period – by 0.3 percentage points to 27.3 per cent of total grocery sales.

Sainsbury’s accounts for 15 per cent of the market, followed by Asda at 14.1 per cent and Morrisons at 9.5 per cent. Co-op, Waitrose, and Iceland have shares of 6 per cent, 4.8 per cent and 2.2 per cent respectively.

Ocado’s share remains steady at 1.8 per cent and its sales were up 13.9 per cent compared with two years ago.

But overall online grocery sales were down by almost 15 per cent compared with 2021 and, over April, online’s share dipped by 1.5 percentage points.

Mr McKevitt said: ‘While online shopping is definitely here to stay, it’s less of a necessity now. Shopper confidence about heading out and about and getting back to store has gone up and half a million fewer households bought over the internet compared with last year.’

Kantar also noted that Russia’s invasion of Ukraine has increased public awareness of supply pressures and there was evidence of stocking up as consumers prepared for limited availability.

Lidl and Aldi both achieved record-breaking market shares, with Aldi at 8.8 per cent and Lidl at 6.6 per cent. Tesco was the only other retailer whose market share grew over the period – by 0.3 percentage points to 27.3 per cent of total grocery sales

Kantar data over the past ten years is shown. Sainsbury’s now accounts for 15 per cent of the market, followed by Asda at 14.1 per cent and Morrisons at 9.5 per cent. Co-op and Waitrose have shares of 6 per cent and 4.8 per cent respectively

Mr McKevitt added: ‘Last weekend several supermarkets introduced restrictions on cooking oil purchases as concerned consumers filled up their cupboards.

Cost of living crisis leaves one in four British families struggling to pay the bills 

Nine in ten Britons are reporting higher living costs with surging food, energy and petrol bills, figures have revealed.

Around one in four households found it ‘very difficult or difficult’ to cover essential bills last month. At the same time, 43 per cent said it was ‘very or somewhat difficult’ to pay for gas and electricity.

The Office for National Statistics figures suggest that families, pensioners and others were already under pressure before energy price hikes and national insurance increases took effect this month. 

The ONS said the most common reasons blamed for the squeeze were food prices (88 per cent), gas or electricity bills (83 per cent), and petrol and diesel (77 per cent). 

Dr Jackie Mulligan, an expert on the Government’s High Streets Task Force, warned the figures pointed to ‘nothing short of a national emergency’.

‘The combination of rising prices and increased demand saw the cooking oil market grow by 17 per cent over April. Sunflower oil, Britain’s most popular choice for frying, and vegetable oil grew even faster – up by 27 per cent and 40 per cent respectively.’

Consumer confidence is now at near record lows in Britain, and the overall inflation rate hit a 30-year high of 7 per cent in March and is expected to peak at nearly 9 per cent later this year.

But despite rising prices, Kantar found that people treated themselves in the lead up to Easter Sunday, which this year fell on April 17.

Mr McKevitt said: ‘There was still evidence of shoppers making the most of the long Easter weekend and splashing out a little bit more to make it special. Premium own label products performed better than any other lines, with sales jumping by 6.5 per cent.’

Yesterday, supermarkets promised tens of millions of pounds in price cuts on household essentials as they bid to hang on to customers facing a cost of living crisis.

Asda has joined Morrisons with a series of high profile cuts designed to stop shoppers deserting to Aldi and Lidl.

However, independent surveys from the Office for National Statistics and others show that food prices continue to rise sharply against the background of higher costs for farmers and manufacturers.

And the evidence from previous supermarket price wars is that, often, reductions announced with great fanfare on some products are more than wiped out by increases on others.

Morrisons said it is launching ‘one of the biggest price cuts in recent years’ with reductions on more than 500 products. It has also announced a raft of multi-save offers and a campaign to get people to switch from big brands to its cheaper own-brand products.

The price of groceries is now increasing at its fastest rate in 11 years. Pictured: File image of Sainsbury’s in London in 2021

Asda said it is investing £73million to tackle the cost of living crisis, including the prices of more than 100 staple products being ‘dropped and locked’.

Boris Johnson hints at further childcare support but no new money for cost-of-living crisis

Parents could receive further childcare support, Boris Johnson has hinted, as he seeks cost-free measures to alleviate the cost-of-living crisis.

Downing Street said the Prime Minister would sign off on new support when he chaired a ‘domestic and economic strategy committee’ in the ‘coming weeks’.

But No 10 suggested no new money would be provided in the coming months to ease the pain after Chancellor Rishi Sunak warned against rising public debt or inflation.

Ministers discussed ‘a number of ideas’ at Cabinet on Tuesday after Mr Johnson asked them to bring ‘innovative’ schemes to tackle soaring costs.

He accepted Britons were facing ‘real pressures’ but blamed external factors such as Russian president Vladimir Putin’s ‘crazed malevolence’ in Ukraine and lockdowns in China.

The Prime Minister’s official spokesman said Mr Johnson told ministers ‘there was more to do, including in areas like childcare, to further ease pressures for those who need it most and to get even more people into high-skilled, high-wage jobs’.

He declined to give more details about the plan, saying it was ‘live policy work taking place and I’m sure we’ll have more to say in the future’. Mr Sunak ‘underlined the importance of not feeding in to further inflation rises and emphasised that the UK is currently spending £80 billion servicing our debt’, No 10 said.

This meant no new money to alleviate the crisis until a further financial announcement from the Chancellor, Mr Johnson’s spokesman suggested. He told reporters: ‘Certainly, the budgets for departments are set and there are no plans to go outside what’s been agreed.’

It was understood the Government was looking at measures that could be introduced quickly rather than those requiring new legislation. The spokesman said the committee was not new and its membership included the Prime Minister, the Chancellor and the Chancellor of the Duchy of Lancaster Steve Barclay.

‘It will meet in the next couple of weeks, I don’t have an exact time frame for you’, he said when asked about the timing.

Morrisons, which earlier this month issued a warning that its profits could be hit by rising inflation and the war in Ukraine, said its price cuts would cover 6 per cent of its total volume sales.

Products include cupboard essentials, fridge staples and frozen food. For example, cereals, cooking sauces, chicken and sausages, eggs, baked beans and rice would be reduced by an average of 13 per cent.

Morrisons has cut the price of a quarter of its 235 entry-level products which include ‘Morrisons Savers’, ‘Morrisons Wonky’ in produce and ‘Morrisons Essentials’ in homeware, health and beauty.

Chief executive David Potts said: ‘We know our customers are under real financial pressure at the moment, and we want to play our part in helping them when it comes to the cost of grocery shopping.

‘These price cuts will have a noticeable and long-term impact on our customers’ budgets and demonstrate our commitment to offering them the best possible value.’

Asda said its price cuts have been driven by a customer survey, which found that 90 per cent were concerned about inflationary pressures and soaring grocery prices.

It promised ‘sweeping’ reductions across fresh fruit and vegetables, fresh meat, store cupboard favourites like rice and noodles as well as soft drinks, desserts and frozen products.

Products covered by the ‘dropped and locked’ price promise will reduce by 12 per cent on average. They include John West tuna, which is dropping by 14 per cent from £3.50 to £3, and Asda easy cook rice 500g, which has dropped by 25 per cent from £1 to 75p.

The price cut campaign comes just weeks after Asda revealed it was launching a new Just Essentials budget range across 300 product lines, which will begin being rolled out from next month.

Asda has also announced 120,000 hourly paid shop floor staff would see their pay increase to £10.10 per hour from July, – 60p more than the national living wage.

Co-owner of Asda, Mohsin Issa, said: ‘We know household budgets are being squeezed by an increasing cost of living and we are committed to doing everything we can to support our customers, colleagues and communities in these exceptionally tough times.

‘We’re standing side by side with the families and communities who are juggling so many demands now. We’re taking unprecedented action to give families some additional stability and certainty in their weekly shopping by lowering and locking over 100 prices until the end of the year.’

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