UK shoppers turn to discounters

UK grocery inflation hit 9.9per cent in the four weeks to July 10, adding 454 pounds ($543.7) to Britons' annual bills amid a worsening cost of living crisis, industry data showed on Tuesday.

Market researcher Kantar said the inflation rate was the second highest it has seen since it started tracking supermarket prices in this way in 2008.

"We're likely to surpass the previous high come August," warned Fraser McKevitt, Kantar's head of retail and consumer insight.

The researcher said prices are rising fastest in markets such as dog food, butter and milk.

Food inflation could reach 15per cent this summer and 20per cent early next year according to some forecasts.

Kantar said sales on a value basis rose 0.1per cent at market leader Tesco (TSCO.L) over the 12 weeks to July 10, but fell at Sainsbury's (SBRY.L), Asda and Morrisons as shoppers switched to German-owned discounters Aldi and Lidl.

Lidl was Britain's fastest growing grocer over the 12 weeks with sales up 13.9per cent, while Aldi's were up 11.3per cent.

Both hit record market shares, with Lidl at 7.0per cent and Aldi at 9.1per cent - just 0.3per cent below Morrisons, Britain's No. 4 grocer.

"Over 67per cent of people in Britain shopped in either an Aldi or a Lidl in the past 12 weeks, with 1.4 million additional households visiting at least one of the discounters in the latest three months compared with last year," said McKevitt.

Kantar said as prices rise Britons are also increasingly turning to own-label products to drive down the cost of their weekly shop. Sales of supermarkets' own lines grew 4.1per cent over the 12 weeks, while sales of branded items fell 2.4per cent.

Facing the toughest economic conditions in decades, Britain's food retailers are monitoring each others' prices more than ever before.

Kantar said its data also showed Britons preparing for the current heat wave, with sales of ice cream and suncare products soaring by 14per cent and 66per cent respectively over the past four weeks.

It said total UK supermarket sales rose 0.1per cent over the 12-week period - the first time the market has registered growth since April 2021.