More pain for British consumers as grocery prices rise

With inflationary pressures mounting in the British economy, one Bank of England policymaker on Saturday told households to get ready for early interest rate rises.

A survey published on Monday by pollsters YouGov and consultancy CEBR meanwhile said consumer confidence has fallen to a five-month low.

Kantar said prices are rising fastest in markets such as savoury snacks, cat food and crisps while falling in fresh bacon and vegetables.

“In real world terms, the average household had to spend an extra 5.94 pounds ($8.08) on groceries last month than they did at the same time last year,” said Fraser McKevitt, head of retail and consumer insight at Kantar.

“The typical household spends 4,726 pounds per year in the supermarkets, so any future price rises will quickly add up.”

Kantar first reported grocery prices starting to rise again in August. They rose 1.3 per cent in its September report.

However, Tesco (TSCO.L), Britain’s biggest supermarket group, said last week that its prices were still falling.

Kantar said UK grocery sales fell 1.2 per cent year-on-year in the 12 weeks to Oct. 3, but were higher than pre-pandemic times – up 8.1 per cent compared with the same period in 2019.

It noted that some shoppers’ minds are starting to turn to Christmas, with sales of Christmas puddings up 76 per cent year-on-year in the latest four weeks, sales of toys up 5 per cent and sales of gift wrapping products up 10 per cent.

“It’s important to say, however, that these are still relatively small numbers and anxiety around supply issues has not translated to panic buying – festive or otherwise,” said McKevitt.

Much of the country did, however, see panic-buying of fuel last month as a shortage of tanker drivers led to disruption of supplies.

The reduced availability of fuel meant people limited the number of trips they made to supermarkets.

The average household made 15.5 store visits in the past four weeks, the lowest monthly figure since February.

Conversely the proportion of groceries bought online rose to 12.4 per cent from 12.2 per cent in September.

Tesco, which raised its profit outlook last week, saw its market share increase 0.6 percentage points over the 12 weeks, hitting 27.5 per cent – its highest level since February 2019.

While sales at Tesco rose 1.2 per cent, they fell at major rivals – Sainsbury’s (SBRY.L), Asda and Morrisons (MRW.L).

Separately on Tuesday data published by the British Retail Consortium said that British shoppers increased their spending in September at the slowest pace since January.

REUTERS