UK households face an extra £788 on their annual shopping bills as grocery costs continued to mount in January, indicative data by market researcher Kantar has found.
Grocery price inflation hit 16.7 per cent in the four weeks to January 22, the fastest pace since Kantar began tracking the figure in 2008. The January rate was 2.3 percentage points above December’s reading. Prices for milk, eggs and dog food grew at the fastest pace.
“Late last year, we saw the rate of grocery price inflation dip slightly, but that small sign of relief for consumers has been shortlived,” said Fraser McKevitt, Kantar’s head of retail and consumer insight, with the rate “flying past the previous high we recorded in October”.
Annualised food price inflation was 16.8 per cent in December, according to the most recent figures from the Office for National Statistics.
Grocers competed for customers by boosting their own-label ranges, which rose 9.3 per cent in January, outpacing branded alternatives, which were up by 1 per cent.
High food prices also prompted buyers to turn to discount chains, according to Kantar. Aldi, which demands 9.2 per cent of the market, was the fastest growing grocer for the fourth consecutive month, with sales 26.9 per cent higher from the previous year. Its rival Lidl generated 24.1 per cent more sales.
Many committed to new year’s resolutions of avoiding alcohol, pushing no- and low-alcohol beer volumes up 3 per cent.
UK inflation, at 10.5 per cent last month, has receded from a 41-year peak in October, leaving the Bank of England set to keeping its options open on whether interest rates will peak at 4.25 per cent or 4.5 per cent. The central bank is expected to raise rates by 0.5 percentage points to 4 per cent, a tenth consecutive increase, when it meets on Thursday.