UK grocery price inflation hits record 16.7% adding £788 to yearly shopping bills, figures show

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Grocery price inflation has reached 16.7%, the highest figure since records began in 2008

Grocery price inflation has reached a record 16.7%, adding a potential £788 more to annual shopping bills, figures have shown.

There has been a “staggering” 2.3 percentage point jump in the four weeks to 22 January - which has exceeded the previous high recorded by analysts Kantar in October. It is the highest figure since their records began in 2008.

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Intense competition among grocers striving to retain customers saw supermarkets boost their own-label ranges by 9.3% in January – well ahead of branded alternatives, which were up by just 1%.

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Despite price rises, consumers appear to have maintained New Year’s resolutions and a commitment to Dry January, as sales of no and low alcohol beer were up 3% on last year.

Overall take-home grocery sales rose by 5.7% during the four-week period and by 7.6% over the quarter.

Fraser McKevitt, head of retail and consumer insight at Kantar, said: “Late last year, we saw the rate of grocery price inflation dip slightly, but that small sign of relief for consumers has been short-lived. Households will now face an extra £788 on their annual shopping bills if they don’t change their behaviour to cut costs.

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“Across the market the move is towards everyday low pricing, with many supermarkets offering price matching and using their loyalty schemes to help shoppers save. As a result of this push, the proportion of spending on promotions has dropped to its lowest level since at least 2008 this month, exaggerating the usual post-Christmas drop off in deals.”

Aldi was found to be the fastest-growing grocer for the fourth month in a row. Its sales are up 26.9% year on year and now hold 9.2% of the market.

Meanwhile, Lidl’s sales jumped by 24.1% to give it a 7.1% market share.

Among the three largest grocers, Sainsbury’s sales increased by 6.1%, just 0.1 percentage points higher than Asda and Tesco, to give it 15.4% of the market.

Tesco remains the largest British retailer with a 27.5% market share while Asda holds 14.2%.

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