UK households have paid a record 16.7 per cent more on groceries this month, potentially adding £788 to annual shopping bills, a leading industry research group has found.
Grocery price inflation in the four weeks to January 22 was 2.3 percentage points above December’s reading, the highest level since Kantar began tracking the figure in 2008. Prices for milk, eggs and dog food grew at the fastest pace.
“Late last year, we saw the rate of grocery price inflation dip slightly, but that small sign of relief for consumers has been shortlived,” said Fraser McKevitt, Kantar’s head of retail and consumer insight, with the rate “flying past the previous high we recorded in October”.
Annualised food price inflation was 16.8 per cent in December, according to the most recent figures from the Office for National Statistics.
Grocers competed for customers by boosting their own-label ranges, which rose 9.3 per cent in January, outpacing branded alternatives, which were up by 1 per cent.
High food prices also prompted buyers to turn to discount chains, according to Kantar. Aldi, which demands 9.2 per cent of the market, was the fastest growing grocer for the fourth consecutive month, with sales 26.9 per cent higher from the previous year. Its rival Lidl generated 24.1 per cent more sales.
Many committed to new year’s resolutions of avoiding alcohol and a dry January, pushing no and low alcohol beer volumes up 3 per cent.
UK inflation, at 10.5 per cent last month, has receded from a 41-year peak in October, leaving the Bank of England set to keeping its options open on whether interest rates will peak at 4.25 per cent or 4.5 per cent. The central bank is expected to raise rates by 0.5 percentage points to 4 per cent, a tenth consecutive increase, when it meets on Thursday.
