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Cost of living crisis: UK households to spend extra £380 on groceries

cost of living

The average household in the UK is set to spend an extra £380 on grocery shopping this year. This is according to research firm Kantar Worldpanel.

The survey showed grocery inflation surged to 8.3% in the last four weeks. The highest rate in 13 years.

Fraser McKevitt, head of retail and consumer insight at Kantar said, “The inflation number makes for difficult reading and shoppers will be watching budgets closely as the cost of living crisis takes its toll.”

This adds pressure to the already rising cost of living. Surveys in April showed the highest rise in the inflation rate in 30 years. This will have a significant impact on day-to-day household budgets. Many will be left unable to afford these price rises and may be puhsed into poverty.

Mr. McKevvit said, “based on our latest data, the average annual grocery bill is on course to rise by £380. This is over £100 more than the number we reported in April this year, showing just how sharp price increases have been recently and the impact inflation is having on the sector.” 

Despite sales increasing by 0.4% in the last four weeks, likely impacted by the Jubilee weekend, the survey showed the overall supermarket sales declined by 1.9% in the three months to June 12.

Mr. McKevitt further indicated that the sector has not been in growth since April 2021. He however indicated, “The latest numbers show the market is to an extent returning to pre-Covid norms as we begin comparisons with post lockdown times.”

Consumer Behavior

The survey by Kantar also shows that consumers are switching from branded items. “Own label products are often cheaper,” said Mr. McKevvit. Own label products went up by 12% compared to branded items at 2.9%.

Mr. McKevvit said, “[these figures are] boosted by Aldi and Lidl’s strong performances, both of whom have extensive own-label repertoires.”

Mr. McKevvit also added, “We can also see consumers turning to value ranges, such as Asda Smart Price, Co-op Honest Value, and Sainsbury’s Imperfectly Tasty, to save money, and together all value own-label lines grew by 12%.”

Lidl and Aldi were the only supermarkets with higher sales over the 12 weeks. Their sales rose by 9.5% and 7.5% respectively. Morrisons sales fell by 7.2% in the 12 weeks period making it the biggest loser in the market.

Mr. McKevvit also indicated dog food, butter, and milk prices were rising the fastest, while the price of spirits was falling. Purchases of alcohol went up by a third and 35% more for ice cream during the Platinum Jubilee celebration. Sales of lemon curd also went up by 16%, 58% for fresh cream, 18% for swiss rolls, and 9% for custard.

Final Thought  

With food and groceries inflation is at its highest in 13 years, the weight of the cost of living continues to put pressure on many households in the UK. Households with limited incomes are going to be the hardest hit by this economic crunch.

The Guardian compiled data from the Resolution Foundation and the National Institute of Economic and Social Research (NIESR) to show those with the least will be affected the most. The chart shows how years of austerity and low-income growth have left those with the lowest earnings with little room to maneuver.

Analysts expect price rises to continue at speed until next year. Jack Leslie, a senior economist at the Resolution Foundation had warned in April that the cost of living crisis would “continue to worsen before it starts to ease at some point next year”.

Inflation in the UK is at its highest level in 40 years. The cost of energy and fuel continues to rise. The conflict in Ukraine, sanctions against Russia, and increased Chinese demand for oil have caused oil prices to go up.  

The Government continues to face criticism for how they are handling the cost of living crisis and despite the promises of billions in financial support, the spike in inflation still remains a major challenge to the government and households in the UK.

The inflation figures for May are due to be released on Wednesday by the Office for National Statistics so we shall soon see just how bumpy the economic and therefore political weather is going to get.

Photo Credit: Roger A Smith

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