UK grocery prices rose at a record pace this month, adding £837 to the average annual household bill as the cost of living crisis maintained its grip on shoppers, according to new industry data .
Supermarket prices rose at an annual rate of 17.5% in March, market research group Kantar said on Tuesday, the highest reading since records began in 2008, the cost of eggs, milk and cheese growing fastest.
“Unfortunately, this is more bad news for the British public, who are experiencing the ninth month of double-digit grocery prices inflationsaid Fraser McKevitt, head of retail and consumer insights at Kantar.
Britons are increasingly turning to cheaper supermarkets in response to financial pressures, research has shown.
Lidl was the fastest growing chain in the category with sales growing at an annual rate of 25.8%, taking its market share to 7.4%. Aldi achieved a new record market share of 9.9%, thanks to a 25.4% increase in sales.
People also looked to cut their grocery bills by buying cheaper label items, with own-brand sales up 15.8%, the data showed.
Consumers also shopped around for better deals. Footfall at all grocers has increased, pushing the frequency of visits to its highest level since the start of the Covid pandemic, outside of the Christmas period, Kantar said.
“Buyers are taking action and are clearly looking for the best value,” McKevitt said.
Data showed that more shoppers turned to independent stores when certain groceries were unavailable in large supermarkets. The volume of tomatoes, peppers and cucumbers purchased from these stores increased by 32%, 26% and 21% respectively.
Research from the British Retail Consortiumpublished on Tuesday pointed to a sharp rise in food inflation, which rose last month at its fastest pace since records began in 2005.
Shortages of fruits and vegetables have contributed to the acceleration in prices, according to the BRC.
Bad weather in Europe and North Africa, combined with high electricity costs across the continent, has limited the availability of fruits and vegetables this year, driving up prices.
Last week, the Office for National Statistics reported that inflation jumped to 10.4% in February from 10.1% in January. That disappointed expectations of a decline, with the cost of food and non-alcoholic beverages rising at their fastest pace in 45 years.
Walid Koudmani, chief market analyst at online investment platform XTB.com, said, “People may need to cut back on discretionary purchases to offset the higher cost of groceries,” which could have a negative impact on the economy.
High inflation could cause the Bank of England “to raise interest rates further, leading to reduced investment and slower economic growth”, he added.
Andrew BaileyGovernor of the BoE, said on Monday that the recent turmoil in the banking sector, which began with the collapse of Silicon Valley Bank, would not deter the central bank from controlling inflation with high interest rates.