UK shoppers turn to Aldi and Lidl as cost of living plummets | supermarkets

British shoppers are choosing to shop in greater numbers at discounters as food price inflation hits its highest level in a decade amid a deepening cost-of-living crisis.

Aldi captured its largest ever share of the grocery market and Lidl hit its previous high when grocery price inflation hit 5.2% in March, the highest since April 2012, according to the latest figures from analyst Kantar.

Lidl confirmed its place as the UK’s sixth largest supermarket chain, ahead of Co-op with a 6.4% market share, while Aldi reached 8.6%, less than 1% behind the UK’s fourth largest chain, Morrisons.

Kantar said prices for pet food and savory snacks like chips rose the fastest, but prices for some products like fresh bacon were still falling.

Food price inflation, fueled by the rising costs of staples like wheat and cooking oil, as well as energy and packaging, is forcing shoppers to change their habits as price hikes seep through to supermarket shelves. With consumer price inflation at 6.2% – the highest in three decades – families on tight budgets are looking for ways to save on basic necessities.

Shoppers are increasingly turning to supermarkets’ own brands rather than well-known brands, with more than half of spending on such items – 50.6% – up from just under half a year.

Cooking from scratch, which has grown in popularity during the Covid lockdown, also appears to be more widespread, with the volume of flour sold up 28% from March 2019, while sales of dry pasta are up 17% from pre-pandemic levels have risen.

Fraser McKevitt, Head of Retail and Consumer Insight at Kantar, said: “More and more, we will see consumers and retailers taking action to get a handle on the rising cost of grocery baskets.”

Aldi and Lidl were the only major chains to increase sales in the 12 weeks to March 20, recovering from a downturn in the first phase of the pandemic, when demand for home deliveries surged and interest in shopping waned.

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Morrisons and Asda were hardest hit by the change in habits, possibly losing as their price-conscious shoppers turned to discounters, while Tesco fared best among the big chains but with sales down 5.2% over the three-month period.

Total spending at supermarkets fell 6.3% in the 12 weeks to March 20 compared to the same period last year as the return to the office and the reopening of cafes, restaurants and bars dampened demand for home cooking.

Independent retailers were the biggest losers, with sales falling 13.4% as shoppers returned to the big stores after increasing on-site shopping during the lockdown.

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