Supermarket basics and own brand items prices are rising faster than premium brands, new research has revealed.
The price inflation comes as 55% of Brits have stated that the grocery sector isn’t helping consumers enough to alleviate food price inflation during the cost-of-living crisis.
Will Broome, CEO of grocery retail app, Ubamarket, discusses with Grocery Trader the current state of the grocery retail sector amidst record inflation.
New research courtesy of Which? has revealed that own brand and budget product ranges have gone up by as much as 18% in the last six months, compared to around 13% for premium ranges and 12% for branded items.
Ahead of Christmas, food inflation reached a new high of 16%, according to the Office for National Statistics (ONS). Which?’s research further found that while discount stores remain the most affordable, they are actually the worst hit by overall inflation, with prices going up by an average of 19%. As consumers face the biggest drop in living standards on record, leading grocery retail app, Ubamarket, has commissioned nationally representative research to investigate how this is affecting the sector and how consumers are adapting in response.
Ubamarket’s latest Retail Trends Report found that a staggering 55% of Brits state supermarkets don’t help consumers enough to alleviate food price inflation during the cost-of-living crisis. Many households have increasingly turned to cheaper products to offset soaring bills across the board during a record cost of living squeeze. Recent figures from Kantar show that own-label sales have risen by 11.7% year on year, while the cheapest value own-label lines increased by 46.3%. This is reflected in Ubamarket’s proprietary data, which found that 52% of Brits state they started to use discount stores because of the cost-of-living crisis, but now shop across multiple retailers to keep their expenditure down.
Ubamarket’s latest Retail Trends Report also found that 54% of Brits state they’ve started imposing a limit on how much they spend at the supermarket during the cost-of-living crisis. This is reflective of just how hard families were squeezed last year, particularly in the run up to Christmas. According to a Trades Union Congress (TUC) analysis, the overall cost of a traditional Christmas food shop increased by 18% in comparison to 2021 – three times faster than average wage increases of 5.7% over the same period. In light of this, a recent study found that two thirds of Brits were worried about being able to afford Christmas dinner in 2022.
The impact of Brexit on food inflation is disproportionately affecting the poorest households in the UK, who statistically spend a larger share of their income on food and are more likely to switch to own brand and ‘budget’ products. Ubamarket’s research found that amidst the cost-of-living crisis, 15% of Brits state supermarket prices are now too expensive that they’ve had to start using food banks to feed themselves and their family.
Will Broome, CEO of Ubamarket, comments on the impact the cost-of-living crisis and food inflation is having on consumers: “With prices still rising, Brits had a tough Christmas ahead, and many will be managing their budgets more tightly than at the start of the cost-of-living crisis. It’s no surprise that consumers are feeling extremely let down by the grocery sector.
“Supermarket chains and suppliers rely on narrow profit margins, and while most of the retail sector have felt the effects of the rising rate of inflation – as well as significant supply chain demands – consumer goods and food have borne the brunt of it. The news about inflation disproportionally affecting own brand items and discount stores highlights how the poorest households in the UK are set to be affected the most.
“At Ubamarket, we believe it is the responsibility of retailers to help curb inflation and respond by offering seasonal savings and price cuts for consumers where possible. In light of this, we’ve currently introduced initiatives with some of our partners like the Nash & Gardner’s Budgens in Islington to match inflation and discount hundreds of products on our app accordingly.”
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