Grocery price inflation edges up, but sales growth continues to decline at c-stores

Grocery price inflation increased slightly to 2.0 per cent during the four weeks to 29 September, up from 1.7 per cent last month, according to the latest data from Kantar. Take-home sales at the grocers grew by 2.0 per cent over the same period.

However, sales growth continued to decline in the convenience channel, with symbols and independents seeing 1.2 per cent drop in sales 12-week period to 29 September. Co-op also saw sales decreasing by 0.9 per cent.

Asda, which has been expanding into the convenience sector, was the worst performer with a 5.1 per cent drop in sales.

All three retailers have also been in the red last month, with similar numbers.

Ocado was the fastest growing grocer for the eighth month running, pushing its sales up by 10.0 per cent over the latest 12 weeks. The overall online market expanded by 3.5 per cent over the 12 weeks, now worth £3.7 billion, with 22.1 per cent of households shopping online.

The findings, which come ahead of the chancellor’s autumn budget, showed that spending on promoted items continued to rise, climbing by 7.4 per cent in September as households sought to manage their finances. By comparison, full price sales nudged up by 0.3 per cent.

Despite the annual rate of grocery inflation growing, the contest between the grocers to attract shoppers through their doors has seen prices roll back on some essentials.

Fraser McKevitt, head of retail and consumer insight at Kantar, said the “battle for value” is on in the fiercely competitive sector, leading price cuts on some essentials, despite the growth in inflation rate.

“Supermarkets are doing what they can to keep costs down for consumers and thanks to their efforts the prices in some categories are falling. The average price paid for toilet and kitchen roll is 6 per cent lower year-on-year, for example, while dog and cat food are 4 per cent and 3 per cent cheaper respectively.”

Much of the UK saw record monthly rainfall in September, impacting how people shop. “The unusually wet weather this September had the nation rushing for those classic warming staples. Hot chocolate sales surged by 28 per cent, soup by 10 per cent and home baking by 7 per cent as people looked to stave off the autumn blues,” McKevitt said.

Halloween seems to be on some shoppers’ minds early, and retailers will be hoping for a spooky season sales boost, McKevitt added.

“Pumpkins are flying off the shelves, with sales nearly doubling last September’s figures, at just under £1 million over the last four weeks. Sugar confectionery has also seen a 9 per cent lift, and spending is expected to ramp up further this month as trick or treating approaches – confectionery sales were 16 per cent higher in the second half of October last year.”