As UK grocery inflation breaks records, seafood sales drop

As grocery inflation in the U.K. reached a new peak high in September 2022, chilled fish sales continue to drop.

The inflation of 13.9 percent – a record high since data and consulting firm Kantar began tracking prices in 2008 – is expected to add GBP 643 (USD 722, EUR 739) to the average annual grocery bill, the company said in a press release.

Grocery sales rose 4.8 percent for the quarter ending 2 October, 2022.

“Inflation continues to play a significant role in the performance of meat, fish, and poultry, with the market still seeing high average price growth and large drops in volume,” Kantar noted in its Meat Fish and Poultry Market Update covering the 12 weeks ending 4 September.

While fresh primary meat and poultry realized a slight uplift in value, increasing 1.4 percent, overall chilled fish sales decreased 4 percent in September. 

Sales declines were seen across all seafood categories, except shellfish, which grew 1 percent in sales and 1.5 percent in volume.

Battered fish had the biggest drop in sales, falling 11.6 percent during the quarter, while value-added seafood sales declined 8.9 percent. Sales of breaded items fell 5 percent, sales of smoked seafood declined 4.9 percent, and natural product sales dropped 1.1 percent.

Chilled fish sales volumes dropped 9.9 percent, while added-value volume declined 15.2 percent, and battered products volume fell 16.3 percent.

“Added-value has struggled, thanks to reductions in frequency (down 9 percent), whilst battered has seen penetration drop from 4.1 percent to 3.7 percent,” Kantar said.

The cost-of-living crisis is “still hitting people hard at the checkouts,” Kantar Head of Retail and Consumer Insight Fraser McKevitt said.

Shoppers are sticking with the type of foods they “know and love,” while hunting for cheaper alternatives such as own-label brands. Sales of supermarket own-label lines surged 8.1 percent in September, while branded items declined by 0.7 percent.

“We aren’t seeing dramatic evidence of diets changing. For example, while frozen veg[etable] sales have gone up slightly, there hasn’t been a big switch away from fresh products, which are still worth 10 times more,” McKevitt said.

Shoppers are also finding other ways to get the items they want for less, according to McKevitt. 

“People are pretty savvy at seeking out best value and retailers are expanding their ranges to help them do this,” McKevitt said. “We’ve seen grocers making a virtue of visually imperfect fruit and vegetables in recent years, allowing them to carry on offering the fresh products consumers want but at a cheaper price.”

Consumers’ commitment to buying environmentally friendly products is coming under pressure due to financial pressures, according to Kantar. The proportion of British shoppers who try to buy products with more environmentally friendly packaging is 59 percent, down from 62 percent last year, according to McKevitt.

Rising energy bills are also resulting in a tightening of consumer spending, and shoppers are searching for cheaper ways to cook as they try to avoid using their ovens. Sales of cooking appliances including slow cookers, air fryers, and sandwich makers, which generally use less energy, are up by 53 percent.

For the fifth month in a row, Lidl was the fastest-growing grocer, with a sales hike of 20.9 percent during the quarter, while Aldi’s sales also surged 20.7 percent.

Asda led the way among the biggest traditional supermarkets, boosting sales by 4.5 percent, according to McKevitt.

“It has done particularly well to attract new shoppers over the latest 12 weeks, bringing an additional 417,000 customers through its doors compared with last year,” he said.

Tesco’s sales grew 2.5 percent in the quarter, according to Kantar, but the grocer reported a profit loss of 64 percent in the first half of 2022.

In addition, the massive grocery chain plans to cut 325 jobs at its corporate office in Welwyn Garden City, U.K.

“Last month, we announced some changes to a small number of roles in our office and regional teams, to ensure our business is as simple and efficient as possible and so we can continue to invest for our customers,” a Tesco spokesperson told SeafoodSource.

Photo courtesy of Tupungato/Shutterstock