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UK Grocery Inflation Gains Momentum, But Shoppers Keep Spending

Published on Oct 20 2017 9:20 AM in Retail tagged: Trending Posts / UK Retail / Nielsen / Food Inflation

UK Grocery Inflation Gains Momentum, But Shoppers Keep Spending

UK supermarkets saw sales revenue rise 3.9% in September, despite an increase in grocery inflation, according to the latest data from Nielsen.

However, the organisation says that the amount people are spending on groceries is outstripping the number of items they're buying, as retailers struggle to absorb rising costs in the supply chain.

“Supermarket food inflation, at 2.2%, is at its highest for nearly four years," said Mike Watkins, UK head of retail and business insight at Nielsen.

"Retailers have done a great job of cushioning shoppers from the rising food chain costs they’re experiencing, exacerbated by the weakening pound, but this can’t last for ever.”

Grocery Growth

According to Nielsen's data, many categories experienced strong sales growth in the latest period, including confectionery (+6.6%), alcohol (+5.5%), and packaged grocery (+5.1).

Additionally, all of the major supermarkets saw growth, with the exception of the Co-op, where sales were impacted by selling a number of its stores.

“Inflation is helping supermarkets’ growth and the good news for them is that shoppers are still spending," added Watkins.

"Meanwhile, the good news for shoppers is that grocery inflation is still below that in other parts of the economy – such as travel and fuel – and should peak later in the year. Furthermore, retailers are likely to up their use of price-saving promotions at Christmas, offsetting some of the inflation.”

© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.

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