Data: Grocery sales fall for first time since pandemic began as food inflation surges

For the 12 weeks to April 17, supermarket sales fell 5.9% year on year and 0.6% on a two-year basis, as the period now includes the first lockdown when only essential stores were allowed to open. 

Like-for-like grocery inflation for the period also grew, hitting 5.9% in April – its highest level since December 2011, according to the latest Kantar grocery market share data. 

Kantar head of retail and consumer insight Fraser McKevitt said: “The average household will now be exposed to a potential price increase of £271 per year. A lot of this is going on non-discretionary, everyday essentials, which will prove difficult to cut back on as budgets are squeezed. We’re seeing a clear flight to value as shoppers watch their pennies.”

McKevitt said the major grocers are responding to customer concerns by launching cheaper own-brand lines and slashing prices on everyday essentials. 

“The major retailers are listening to shoppers’ concerns, with Asda launching its Just Essentials line, Morrisons announcing that it is cutting the price of many everyday goods and Tesco locking in savings through its Clubcard strategy.”

Despite surging prices, consumers still treated themselves over the recent Easter break, with sales of premium own-label products jumping 6.5% and outperforming other lines.

Kantar’s McKevitt said the latest figures should be read in the context of lockdown easing, with sales falling 4.1% over the past month as people returned to the office and out-of-home socialising at pubs and restaurants. 

“It is to be expected that sales are down compared with last year when restrictions were still in place. While the number of trips we’re making to the supermarket has remained steady this year, people aren’t buying as much when in store and the average basket size has dropped by 4.5% to £22.39.”

Online sales were down almost 15% compared with 2021, with market share dropping 1.5 percentage points in April. McKevitt said that “while online shopping is definitely here to stay, it’s less of a necessity now”. 

Discounters march on

With customers returning to stores at an increasing rate and facing further squeezes on their budgets, it’s perhaps no surprise that at discounters Aldi and Lidl sales surged during the period. 

Aldi was the fastest-growing retailer in the period, with sales increasing 4.2% year on year and 11.1% on a two-year basis when the UK first went into lockdown. Lidl, by comparison, increased sales 4% on a one-year and 10.3% on a two-year basis. 

McKevitt said: “Over one million extra shoppers visited Aldi and Lidl respectively over the past 12 weeks compared with this time last year. Both retailers achieved record-breaking market shares, with Aldi now holding 8.8% while Lidl stands at 6.6%. Collectively, the two discounters account for 15.4% of the market – up from just 5.5% a decade ago.”

Of the big four supermarkets, only Tesco was able to grow market share in the period, up 0.3 percentage points. Despite this, Tesco’s one-year sales fell 4.8%, while its two-year sales were up 1.3%. 

Sainsbury’s sales slumped 7.7% year on year and were down 2.2% on a two-year basis. Asda and Morrisons saw drops of 10.3% and 10.5% year on year and slumps of 3.1% and 4% on a two-year basis respectively. 

The fall in online shopping also hit Ocado, with its year-on-year sales dropping 10.7%. The Co-op, Waitrose and Iceland also reported sales slumps.