8 hours ago
9
Consumers are expected to switch to cooking simpler meals at home to save money, as rising food prices threaten to add nearly £300 a year to household grocery bills, according to research.
Shoppers are increasingly picking up supermarket own-label products to help manage their budgets, according to the research company Worldpanel, as grocery inflation stepped up from the 4.7% reported in June to 5.2% in July, the highest level since January 2024.
If food prices remain elevated, it could add £275 to the average household grocery bill – now £5,283 a year – analysts at Worldpanel estimated.
Fraser McKevitt, the head of retail and consumer insight at Worldpanel, said just under two-thirds of households were “very concerned” about the cost of their grocery shopping.
“Own-label products, which are often cheaper, continue to be some of the big winners and, in fact, sales of these ranges are again outpacing brands, growing by 5.6% versus 4.9%,” he said.
“These inflationary worries aren’t just changing what we buy, but how we prepare it, too. We often see people choosing to make simpler meals when they are trying to save money, and today, almost seven in 10 dinner plates include fewer than six components.”
The news comes as separate official figures released last week that inflation in the UK unexpectedly rose in June, driven by fuel and food prices.
The Office for National Statistics said the consumer prices index rose by 3.6%, and food price inflation was up for a third consecutive month, to 4.5%. That was driven by the rising price of cakes, meat, milk, eggs and cheddar cheese, the ONS found.
Rising prices come as supermarkets warn they are coming under pressure from higher wage costs as well as a possible shake-up of business rates.
Simon Roberts, the boss of Sainsbury’s, told the Telegraph that big retailers would “pull away from our high streets” as they adjusted to a big rise in national insurance contributions and a minimum wage increase.
He told the paper: “The changes being proposed will further increase the negative impact of business rates and won’t stimulate the growth or investment into our high streets and jobs that we all want to see.”
Helen Dickinson, the chief executive of the industry body the British Retail Consortium, has said higher wage costs, as well as external pressures such as poor harvests, could drive up food prices.
after newsletter promotion
Dickinson told the Sunday Times: “Retailers are doing everything they can to shield customers from these mounting pressures, but there is only so much they can absorb before costs start feeding through to prices.”
More shoppers looking for supermarket deals helped the German discounter Lidl reach a record high market share at 8.3% in July. It attracted more than 500,000 new customers to its stores, Worldpanel found.
Ocado was again the fastest-growing grocer in the sector, as its sales were up by 11.7% in the 12 weeks to 14 July, although its market share remained at 2%. Tesco had the biggest share of the market, at 28.3%.
At Marks & Spencer, spending on groceries was up by 6.5%, compared with a rate of 14.4% before it suffered a cyber-attack in April. In June, spending on groceries at the retailer rose by 12.3%.
Sales at Asda, which is attempting a turnaround fell 3%, while the Co-op, also hit by a cyber-attack, recorded a drop of 3.7%.
