Grocery inflation hits 13-year high

According to retail consultancy Kantar, like-for-like grocery inflation was 7% in the past four weeks, the highest since May 2009. In the 12 weeks to 15 May, grocery inflation was 5.7%, with prices rising fastest in dog food, savoury snacks and beef, and falling in spirits.

Fraser McKevitt, head of retail and consumer insight at Kantar, said: "People are really feeling the squeeze at the supermarket tills and they’re having to stretch their budgets further to accommodate rising prices.

"Understandably, only a third of consumers now think of themselves of being in a comfortable financial position."

UK consumers are facing a cost of living crisis, with inflation at a 40-year-high of 9% and energy bills rising 54% in April. National Insurance contributions also went up. According to a recent survey carried out by Kantar, 43% of households described themselves as ‘managing’ and 22% said they were ‘struggling’.

Of those struggling, over nine in ten said rising food prices was the second most important issue after energy bills.

Supermarket sales fell 4.4% year-on-year in the 12 weeks to 15 May, Kantar said. But in the last month the rate of decline slowed, with sales off just 1.7% as shoppers started to stock up ahead of the long Platinum Jubilee weekend.

McKevitt said there had been a 10% jump in supermarket sales in the week leading up to the Diamond Jubilee in 2012, and a similar uptick was expected this year. "We should never underestimate the appetite for a party, especially a royal one," he added.

Among individual retails, discounters Aldi and Lidl were the only grocers to report a rise in sales. Lidl reported a 6% uplift in the 12 weeks to 15 May, while Aldi saw a 5.8% increase.

They now have market shares of 6.9% and 9.0% respectively, both fresh highs.

Elsewhere, and sales eased 3.1% at Tesco, the UK’s largest grocer, although its market share nudged 0.4% higher to 27.4%. It is the seventeenth consecutive month that Tesco has seen its market share improve.

Sales fell 6.7% at J Sainsbury, 8.7% at Asda and 9.5% at Wm Morrison. Waitrose, part of the John Lewis Partnership, saw sales decline 8.9% while Ocado recorded an 8% fall.