Supermarket prices set to add £180 a year to average shopping baskets

Annual shopping bills are set to rise by around £180 on average as inflation pushes up the cost of groceries, according to new data.

Analysts at Kantar said inflation in the past four weeks stands at 3.8% – a rise on levels in December – with savoury snacks, fresh beef and crisps up, whilst beer, bacon and vitamins fell.

The higher prices come as sales continue falling compared with a year ago when lockdown restrictions saw restaurants, pubs and non-essential retailers closed.

But there was strong growth in sales of vegan and low-alcohol products as customers embraced Dry January and Veganuary.

In the 12 weeks to January 23 overall sales fell 3.8%, although they remain 8% higher than pre-pandemic levels, Kantar said.

Fraser McKevitt, head of retail and consumer insight at Kantar, said: “Prices are rising on many fronts, and the weekly shop is no exception.

“Like-for-like grocery price inflation, which assumes that shoppers buy exactly the same products this year as they did last year, increased again this month.

“Taken over the course of a 12-month period, this 3.8% rise in prices could add an extra £180 to the average household’s annual grocery bill.

“We’re now likely to see shoppers striving to keep costs down by searching for cheaper products and promotions. Supermarkets that can offer the best value stand to win the biggest slice of spend.”

The market growth figures do not include on-the-go food and drink purchases, which are likely to be higher than last year.

Mr McKevitt added that the end of lockdown rules and a return to the office means pre-pandemic shopping patterns are starting to return.

He explained: “Since the first lockdown in March 2020, shoppers have been buying in bulk and visiting the supermarket less often.

“But basket sizes are now 10% smaller than this time last year, hitting their lowest level since the beginning of the pandemic, while footfall increased by 5% as every major retailer was busier in their stores.”

Londoners changed their habits the most, Kantar said, with take-home sales of food and drink down 11%.

The return to work also saw an increase in sales of personal hygiene sales, Kantar found, with razor blade sales up 14% and deodorant up 20%.

There was also strong growth in plant-based products, with shoppers embracing vegan diets in January. Around 10.7 million households bought at least one dairy-free or meat-free alternative.

Whilst those embracing Dry January by avoiding alcohol helped push alcohol-free sales up 5%.

Only Aldi and Lidl recorded year-on-year growth during the period, up 1.2% and 1.1% respectively, although all supermarkets enjoyed rises on a two-year basis.

The discount supermarkets enjoyed growth for the first time since June last year and both grew market share, along with Tesco and Waitrose.

Sainsbury’s now holds 15.6% of the market, Asda 14.4% and Morrisons 9.9%. Co-op share stands at 5.7% and Iceland at 2.4%.

There were heavy falls in online grocery sales as shoppers opted for trips to supermarkets instead, with online purchases down 15% year-on-year.

But online orders remain above pre-pandemic levels, with orders accounting for 12.5% of all grocery spend.