Britons have cut back on their supermarket shopping and traditional summer purchases due to recent bad weather, despite a further decline in grocery price inflation, according to a report by Kantar.
In the four weeks to June 9, supermarket prices were 2.1% higher than a year ago, down from the 2.4% inflation rate in May. This marks the sixteenth consecutive month in which price increases have slowed. Kantar noted that costs are falling in nearly a third of the categories it monitors, including toilet paper, butter and milk, an improvement from last year when just 1% of categories showed a price decline.
The monthly report precedes the release of official UK inflation figures for May, which are expected to show headline inflation fell from 2.3% in April to the government's 2% target.
Fraser McFate, head of retail and consumer at Kantar, stressed that although grocery inflation has fallen, “the cost of living crisis is far from over.” He pointed out that 22% of families reported difficulties in covering expenses or simply covering their expenses.
“However, there are positive signs that many of us no longer feel the need to restrict our spending so greatly, as lower inflation helps ease the pressure on people's pockets,” McFate added.
Despite 36% of households describing their financial situation as comfortable – the highest percentage since November 2021 – sales rose just 1% in June, the slowest increase since June 2022, according to Kantar. Turnout also decreased.
The wet weather has led to about 25% fewer sun care products being purchased and 11% fewer prepared salads being purchased than last year. Conversely, fresh soup sales jumped nearly 24%.
“The sixth wettest spring on record not only dampened our spirits ahead of summer; This has affected the grocery sector too, as Britons seem reluctant to frequent stores. We haven't reached the typical summer products yet and are making some unexpected purchases for June.
Supermarkets and pubs are counting on England and Scotland's strong performances at Euro 2024 to boost spending, with promotions for beer and ales jumping more than 40% in the past four weeks.
“Retailers will be competing with fans coming out of the house to watch football as well as each other,” McFate said. “Pubs in particular could benefit from a boost – whether football returns home or not. During the last tournament in 2021, sales of food and non-alcoholic drinks in bars rose by 60% compared to the average month that year.
Tesco has strengthened its position as Britain's largest supermarket, with a 27.7% market share after sales increased by 4.6% in the three months to June 9 compared to the previous year. Sales rose at all major supermarkets over the period, except Asda, which saw a 4% fall, and Co-op, which fell 2.3%.
Ocado emerged as the fastest growing grocery store for the fourth month in a row, with a 10.7% increase in sales over the 12 weeks to 9 June. Nearly a quarter of British households (23%) have shopped online in the past three months, with more than 4% choosing Ocado.
Discounter Aldi, the fourth-largest retailer by consumer spending, boosted its sales by 0.8% and now has a 10% market share.