Shoppers clamber for deals as grocery inflation slows further

23rd Apr 2024 08:57

(Sharecast News) - UK households collectively saved £1.3bn on supermarket deals over the last four weeks, equating to £46 per household, according to fresh industry data released on Tuesday.

The saving came amid a decline in grocery price inflation, which according to Kantar Worldpanel, had fallen to 3.2% during the same period, marking the 14th consecutive monthly drop.

That drop in inflation was facilitated by a notable increase in promotional spending, with items purchased on offer constituting 29.3% of supermarket sales - the highest level outside of Christmas since June 2021.

Despite that, overall take-home grocery sales saw a modest rise of 3.3% this month.

"We've been monitoring steady annual growth in promotions over the past 11 months as retailers respond to consumers' desire for value," said Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel.

"Deals helped shoppers save a massive £1.3 billion in the latest four weeks, almost £46 per household.

"This emphasis on offers, coupled with falling prices in some categories like toilet tissues, butter and milk, has helped to bring the rate of grocery inflation down for shoppers at the till."

An early Easter did not deter seasonal sales, as spending on confectionery surpassed £100m for the first time ever in the seven days leading up to and including Easter Sunday.

Looking ahead, both shoppers and retailers are now focusing on the upcoming bank holidays in May.

Historical data indicated an average increase in sales of £82m in the weeks preceding the two standard long weekends in May 2023, representing a 3% uplift in spend.

"Higher prices have played a role in reaching that record spend figure, but the number of chocolate eggs sold in the seven days to Easter was also 3% higher this spring than last, with 37% of consumers buying one in that week," Fraser McKevitt added.

"Hot cross buns were even more popular, enjoyed by 45% of Britons."

McKevitt said the growth in confectionery also reflected a broader trend towards snacking in British diets.

"Over the past decade, there's been an increase in almost all types of snacks; consumers munched on chocolate confectionery 93 million more times in the year to June 2023 than in the 12 months to June 2013.

"Fruit has also bumped up the list of Britain's snack choices - 314 million more pieces of fruit were eaten between meals in 2023 than in 2013."

Ocado emerged as the fastest-growing grocer yet again, with a 12.5% improvement in sales over the 12 weeks ended 14 April.

That growth outpaced the total online market, which grew 6.8% during the same period.

Ocado's market share rose to 1.9%, up from 1.7% a year ago, while the total online market reached a share of 12.0% for the first time since July 2022.

Britain's leading grocers, Tesco and Sainsbury's, both experienced gains in market share, each increasing by 0.4 percentage points in the latest 12 weeks.

Tesco held 27.4% of the market, while Sainsbury's held 15.3%.

Sainsbury's saw a sales increase of 6.8%, while Tesco grew by 5.9%.

Lidl achieved a record 8.0% share of the market, up by 0.4 percentage points compared to a year ago, driven by sales growth of 9.1%.

Similarly, Aldi reclaimed a 10.0% market share, with sales up 2.8%.

Morrisons maintained its 8.7% market share, its best performance since 2021, with 3.8% sales growth.

Waitrose and Iceland also retained their market share positions at 4.5% and 2.2% respectively, with both experiencing sales growth of 3.7%.

Asda currently held 13.4% of the market, while the Co-op accounted for 5.4%.

Reporting by Josh White for Sharecast.com.