UK Food & Grocery Sector Report summary
September 2023
Period covered: Period covered: 30 July – 26 August 2023
3 minute read
Note: This report summary is one or two months behind the current month as standard reporting practice. The content is indicative only and incomplete with certain data undisclosed. Become a member to access this data or take out a free 30 day membership trial now.
Food & Grocery Sales
Food & Grocery sales rose xx% YoY in August, according to the Retail Economics Retail Sales Index (value, non-seasonally adjusted).
Key factors impacted this performance:
Elevated inflation: Food inflation remains stubbornly high compared to historical norms. This is lifting sales in value terms, but dragging down volumes, as consumers pay closer attention to budgets and reduce basket sizes. In volume terms, Food & Grocery sales fell xx% YoY in August, improving on the previous month (-4.9%)
Volatile weather: Unpredictable weather continued in August, with storms, below-average temperatures, and limited sunshine impacting sales of BBQ food and summer lines.
World Cup cheer: The Lionesses' progress in the Women's World Cup brought joy to consumers and provided a reason for gatherings, supporting demand for party-related food and drinks on match days.
Downpours dash hopes of volume recovery
Despite the lack of warm summer weather, August witnessed a partial recovery in food and drink sales, recouping some of the ground lost in July.
Food inflation remains on a decelerating trajectory, falling to xx% in August, from xx% the prior month (CPI).
Grocery prices dropped to their lowest level in over a year, at xx% in the four weeks to 3 September (Kantar).
Reduced prices of essentials such as milk, cheese, eggs and vegetables contributed to the lower rate of food inflation, as retailers pass on lower wholesale costs.
Major grocers, acutely aware of consumers’ price sensitivity across essentials, continue to launch strategic price cuts.
Morrisons is reducing prices on 170 products this month as part of its eighth round of price cuts this year.
M&S Food are freezing prices on 140 grocery products until after Christmas.
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Food retail sales values and volumes diverge
Source: Retail Economics, ONS
