The food industry has been hit by record levels of energy and input costs made significantly worse by the war in Ukraine, forcing inflation to record highs.
Food inflation is now at the highest rate ever recorded, up 13.9% when compared to the same period last year. That equates to annual food bills increasing by £643, taking annual grocery bills from £4610 to £5,265 (according to Kantar 12 weeks ending 2 October).
If consumers continue to buy the same weekly items, this equates to an extra £12.36 per week.
Grocery price inflation in September hit 13.9%
Kantar data over 12 weeks ending 2 October 2022
Retailer response
To mitigate the impact of high food inflation on their weekly groceries, consumers are changing the way they shop.
They are cutting down on certain products and switching to cheaper alternatives. Be it moving from branded to own label, premium to value ranges, the shift has been significant with sales of the very cheapest, value own-label ranges up by +33%.
Many retailers have responded by investing in their own label ranges. Asda has recently launched a revamped basic range, Just Essentials, and placed a temporary limit on the number of products customers can buy to keep up with demand.
Both Tesco and Sainsburys have adopted Aldi price matching strategies to protect consumers from rising prices.
Co-op have invested £37 million into cutting the prices of more than 100 convenience items. It also announced plans to “simplify” its range amid the cost-of-living crisis and warned some products would lose shelf space.
Consumers switching to discounters
As well as making changes to what they buy, consumers are also switching where they buy.
According to Kantar, Aldi has reportedly gained more than 1.65 million customers and have seen sales rise by 20.7% in the period ending 12 weeks up to 2 October.