Annual UK grocery bill could rise by £180 amid cost of living squeeze

The average annual grocery bill is on track to rise by £180 this year as the UK’s worsening cost of living squeeze continues, according to the consultants Kantar.

Grocery prices rose 3.8% over the four weeks to 23 January compared with the same period last year, according to the market research firm. Prices are rising fastest for fresh beef and poultry, savoury snacks, crisps, skincare and cat food but are falling for fresh bacon, vitamins and beer.

Fraser McKevitt, Kantar’s head of retail and consumer insight, said: “Prices are rising on many fronts, and the weekly shop is no exception. Taken over the course of a 12-month period, this 3.8% rise in prices could add an extra £180 to the average household’s annual grocery bill.

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“We’re now likely to see shoppers striving to keep costs down by searching for cheaper products and promotions. Supermarkets that can offer the best value stand to win the biggest slice of spend.”

The UK’s official inflation rate hit 5.4% in December, the highest since 1992, and is on track to head above 6% in coming months as energy costs soar.

Supermarket sales fell by 3.8% over the 12 weeks to 23 January, according to Kantar, because of a tough comparison with the start of 2021, when coronavirus lockdowns boosted shopping, but grocery spending remains 8% higher than pre-pandemic times.

As more people embraced Veganuary or Dry January after an indulgent Christmas, sales of plant-based products and no- or low-alcohol drinks rose.

Sales of alcohol-free beer climbed 5% and retailers’ own-label ranges marketed as healthy increased by 8%. While fresh fruit, salad and vegetable sales were down compared with last year, plant-based products proved more popular than ever. A record 10.7 million households bought at least one item that was a dairy alternative, a meat substitute or labelled as plant-based this January.

The Kantar data also points to more people going out to socialise as Covid-19 restrictions were relaxed. The supermarket sales figures do not include on-the-go food and drink purchases, which are likely to be higher than last year, the firm said.