Britons are tightening their belts even as grocery inflation shows signs of slowing. Kantar’s latest report reveals a complex picture of consumer behaviour amidst ongoing financial pressures.
Unfavourable weather and persistent economic challenges have led to cautious spending patterns, with supermarket and summer purchases taking the hit.
Grocery Inflation Slows Down
In the four weeks to 9 June, supermarket prices rose by 2.1% compared to the previous year, down from May’s 2.4%. This marks the 16th consecutive month of slowing price increases.
Kantar’s data indicates that costs are falling in nearly a third of the categories monitored, including essentials like toilet tissue, butter, and milk. This is a significant improvement from the previous year when only 1% of categories saw price declines.
Household Financial Struggles Persist
Despite easing inflation, the cost of living crisis remains a pressing concern. Fraser McKevitt from Kantar noted that 22% of households are struggling to cover expenses or are barely making ends meet.
However, there are some positive signs. McKevitt mentioned that lower inflation is beginning to ease pressure on finances, and fewer people feel the need to restrict spending as much as before.
Consumer Behaviour and Weather Impact
The British weather has played a crucial role in shaping consumer behaviour. A wet spring led to nearly 25% fewer sun care items and 11% fewer prepared salads being purchased compared to last year.
Conversely, sales of fresh soup increased by almost 24%. The sixth wettest spring on record has had a tangible impact on shopping habits, deterring Britons from making typical summer purchases.
Sports Events and Retail Expectations
Retailers and pubs are hoping for a spending boost from England and Scotland’s strong performances in the Euro 2024 tournament. Beer and lager promotions have surged by over 40% in the past four weeks.
Pubs, in particular, stand to benefit significantly. During the last tournament in 2021, sales of food and non-alcoholic drinks in pubs soared by 60% compared to the average month that year.
Supermarket Market Share Shifts
Tesco has solidified its position as Britain’s largest supermarket, achieving a market share of 27.7%. This follows a 4.6% rise in sales in the three months to 9 June compared to the previous year.
Other major supermarkets also saw increases, except for Asda and Co-op, which experienced declines of 4% and 2.3%, respectively.
Ocado’s Impressive Growth
Ocado has emerged as the fastest-growing grocer for the fourth consecutive month, with a sales increase of 10.7% over the 12 weeks to 9 June.
Almost a quarter of British households shopped for groceries online in the last three months, with over 4% opting for Ocado.
Aldi’s Steady Climb
Discounter Aldi, now the fourth-largest retailer by consumer spending, saw a 0.8% increase in sales and holds a market share of 10%.
The report by Kantar paints a detailed picture of current consumer trends amid fluctuating economic conditions.
Despite a decrease in grocery inflation, Britons remain cautious in their spending habits, influenced by the weather and financial pressures.