UK households could see their annual food bills rise by £271 as grocery prices hit their highest level in over a decade, according to research firm Kantar. The data shows that grocery prices in April were 5.9% higher than a year ago, the largest increase since December 2011.
Supply chain issues, the war in Ukraine, and rising raw material costs are driving up prices, with essentials such as dog food, fresh lamb, and savoury snacks seeing the steepest increases. Kantar's head of retail and consumer insight, Fraser McKevitt, said: 'The average household will now be exposed to a potential extra £271 per year. A lot of this is going on non-discretionary, everyday essentials which will prove difficult to cut back on as budgets are squeezed.'
As shoppers look to cut costs, discount retailers Aldi and Lidl have seen a surge in popularity. Aldi was the fastest growing retailer, with sales up 4.2% over the 12 weeks to 17 April, while both chains attracted over one million extra shoppers compared to the same period last year. Tesco was the only other major supermarket to increase its market share, rising 0.3 percentage points to 27.3%.
In response to the cost-of-living crisis, Morrisons and Asda have announced price cuts on hundreds of products, while Iceland's boss Richard Walker pledged a 'constant drum beat' of deals. Meanwhile, the latest inflation figures show UK prices rising at their fastest rate in 30 years, with energy, fuel, and food costs all contributing.
The war in Ukraine has also led to shortages of sunflower oil, prompting some supermarkets to introduce purchase limits. Kantar reported that the cooking oil market grew by 17% in April, with sunflower oil up 27% and vegetable oil up 40%. Overall, supermarket sales have fallen by 0.6% compared to two years ago, as online grocery sales dropped nearly 15% from 2021 levels.
