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UK: Staple Supplies Like Butter, Tea and Fish Spike

foodingredientsfirst 2017-03-09
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UK food staples like butter, tea and fish all saw prices rise by more than 5% during the last three months, alongside fresh fruit and vegetables which are also costing shoppers in Britain more.

According to the latest figures from Kantar Worldpanel, inflation has increased to almost the highest in three years with 1.4% in the 12 weeks to February 26, from 0.7% in the 12 weeks to January 29.

The uptick in prices is understood to be an indication of further high costs for food throughout 2017. However, the UK’s “big four” supermarkets - Tesco, Asda, Sainsbury’s and Morrisons - still hold more than 70% of the market.

“Like-for-like inflation has doubled since last month to stand at 1.4% during the past 12 weeks. However, when placed in their longer-term context, these price increases are still fairly minimal,” says Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel.

“Staples such as butter, tea and fish all saw prices rise by more than 5% during the past 12 weeks, as fruit and vegetables – many of which are imported – also saw an uptick in price. However, it’s important to point out that inflation is still far from universal, with prices actually falling across a number of categories including crisps, bacon and eggs.

“While consumers may be starting to feel a very slight pinch, increased inflation has led to overall market growth. Simultaneously, combined sales at the UK’s four largest supermarkets increased by 0.5% year on year. This is a timely reminder that despite the huge interest in the discounters during recent years the big four remain a force to be reckoned with: they still hold just over 70% of the market, with almost 99% of the population shopping in a Tesco, Sainsbury’s, Asda or Morrisons during the latest quarter.”

Individually, Morrisons grew ahead of the market with a sales increase of 2.6% signaling its fastest growth in five years. Holding market share steady year on year at 10.6%, the retailer’s positive bricks and mortar performance was buoyed further by the continued rapid expansion of its e-commerce business.

Tesco increased sales for the sixth period in a row – a run it hasn’t experienced since January 2014 – although this wasn’t enough to stop the grocer’s market share slipping by 0.5 percentage points to 27.9%. Asda was the only retailer to see sales fall during the past 12 weeks, but a decline of just 0.8% represents a significant improvement and is the grocer’s best performance since November 2014.

“To the catchy soundtrack of its new ‘food dancing’ advertising campaign, Sainsbury’s returned to growth for the first time since March last year, with sales up by 0.3%. At the same time, its market share slipped by 0.3 percentage points leaving the grocer with 16.5% of the market,” adds McKevitt.

“Lidl became Britain’s fastest growing supermarket during the past 12 weeks – with sales up by 13.0% – while Aldi grew almost as quickly, increasing sales by 12.9% to reach a record market share of 6.3%. Also growing ahead of the market was Iceland, with sales up 8.8%. Meanwhile Co-op and Waitrose both increased sales by 1.7% and 2.9% respectively.”

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