British shoppers are making a huge switch to budget ranges and discount chains as department store inflation hit a record high of around 15% last month, driving up the average annual bill by £682 a year.
More than a quarter of households say they are struggling financially, double the percentage a year ago, as the cost of groceries rose 14.7% in October compared to last year. This is the highest level since Kantar, which produces the data, began tracking price changes in 2008.
“Once again, we have a new record for grocery inflation and it’s now too early to pinpoint the top,” said Fraser McKevitt, Kantar’s head of retail and consumers.
Nine out of 10 people concerned with their finances said food and drink prices were a concern, second only to energy bills, “so it’s clear how much grocery inflation is hitting people’s wallets and adding to their local anxieties,” he said.
Sales of the cheapest supermarket brand ranges rose 42%, although some of that will come down to higher prices, while sales of branded goods rose 0.4%, indicating a significant drop in the number of items sold after inflation entered. the account.
Opponents Aldi and Lidl are also benefiting from households’ efforts to manage their budget with sales up 22.7% and 21.5% respectively in the three months to the end of October, compared to 5.2% growth in the market as a whole. In contrast, Morrisons, Waitrose and independent grocers reported a drop in sales.
There are signs that shoppers are curbing spending on non-essential goods, McKefit said, with sales of pumpkins plunging for Halloween last year. Sales of discount sweets also fell.
The muted response to Halloween, which is now a big event on the UK’s shopping calendar, could point to a similar factor in spending for Christmas.
British shoppers are expected to spend £4.4 billion less on non-essentials – down 22% – in the run-up to Christmas as the rising cost of living puts a strain on their surplus cash.
When it comes to festive food and drink, 44% of those questioned said they would cut back this year, including turkey and wine, in the latest Barclaycard debit and credit card survey. The two fifths said they were planning to reduce their spending on birthday parties and socializing. Spending in supermarkets rose 4.6% in October, below the inflation rate, indicating a decrease in the number of items purchased or a shift to discounted price ranges.
“This time last year, 2 million consumers actually bought festive Christmas candy,” McKefit said. “We saw 32% fewer shoppers doing so this time, suggesting that people aren’t trying to spread the cost of their purchases — at least not in October “.
Kontar’s findings contradict Sainsbury’s view of Christmas shopping. The supermarket said it moved the launch of its festive ads a week ago because its customers spread out the cost of their annual blast, and buy some items earlier than usual.