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UK Food & Grocery Sector Report | Insight & Analysis

March 2024

What's included in this report?

  • Grocery Market Share - Top 10 UK Food retailers
  • Food & Grocery Market Size estimates (£m)
  • Sales Growth by category
  • Total Food Spending by category (£m)
  • Online Grocery Sales (y-o-y)
  • Forecasts for 2024 - 2028
  • Footfall by channel and region
  • Regional Weather data and more…

UK Food & Grocery Sector Report : March 2024

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Report Summary

Period covered: 31 December 2023 – 27 January 2024

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 6.5% YoY in January, according to the Retail Economics Retail Sales Index (value, non-seasonally adjusted).

Key factors impacted this performance:

Cautious consumers: January saw a renewed focus on budgets after indulging over the festive period. Cost-conscious shoppers cut back on basket sizes, prioritising warming winter meals, and avoiding waste —a nod to the need to pay off Christmas credit card bills and offset higher energy costs.

Inclement weather: January's trio of storms: Henk, Isha, and Jocelyn – dragged on in-store footfall but boosted online activity, while the severe weather encouraged more at-home meal occasions, with hospitality venues experiencing flat sales in January (0.1% YoY, CGA-RSM) as consumers stayed indoors.

New Year’s Eve: This year’s January trading period (Dec 31-Jan 27) included New Year’s Eve, boosting sales of party food and refreshments, as the bad weather led many people to celebrate at home. 

Health-conscious resolutions: The advent of the New Year propelled health-focused initiatives such as Dry January and Veganuary, supporting demand for No-Lo alcohol drinks and plant-based products.  

 

 

Solid start to 2024

Food & Grocery performed robustly in January, outperforming the wider retail sector once again (Food: 6.5%, Non-Food: -0.7%).

Poor weather, rail strikes and the usual post-festive caution in spending habits resulted in more time (and meals) at home.

Encouragingly, Food inflation remains on a downward trajectory, easing to 6.9%, from 8.0% in December - the lowest level since April 2022.

Notably, monthly food prices fell for the first time since September 2021, down 0.4% in January, which was the largest monthly fall since July 2021.

Despite lower inflation, the headline rate of growth in grocery sales was relatively stable in January compared to December, indicating a significant uptick in grocery sales volumes.

However, this must be put in context, as the market has endured a prolonged period of deep volume declines, and the economic backdrop remains mixed.

Households and businesses are feeling the impact of higher interest rates, tipping the economy into a shallow recession.

While an increase to the Ofgem energy price cap at the start of the year saw the typical annual household energy bill go up by 5% or £94 to £1,928. It contributed to overall inflation remaining unchanged at 4.0% (ONS) – double the Bank of England’s 2% target.

On the earnings front, there was a silver lining as average wage growth continues to surpass inflation. Although the peak wage growth rate of 8.6% in mid-2023 has decelerated to 6.2%, wages are still outpacing the slowing rate of inflation, driving real earnings.

On the back of this, consumer confidence improved in January, reaching its highest level in two years at -19 (GfK).

 

 

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Food retail sales values and volumes diverge

Source: Retail Economics, ONS

Latest monthly UK Food & Grocery Sector Report

Report: January 2024 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 me... read more
Report: December 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 me... read more
Report: November 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 me... read more
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Report Contents

UK Food & Grocery Sector Report Report
  • Executive Summary
  • Sector analysis
  • Food & Grocery – Retail Economics Index
  • Food – BRC-KPMG Retail Sales Monitor
  • By Size of Retailer – Office for National Statistics
  • Macro Factors
  • Consumers
  • Footfall
  • Labour market
  • Earnings
  • Costs, Prices and Margins
  • Weather Watch
  • Average Temperature
  • Average sunshine hours
  • Average Rainfall

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About our reports and subscriptions

Retail Economics publishes monthly Retail Sector Reports for the UK Food & Grocery sector giving you actionable insights for your business.

 

It provides in-depth analysis of the latest macroeconomic and consumer trends affecting UK supermarkets and grocers including market size estimates for: Fresh & Chilled, Ambient, Alcohol and Tobacco, Non-Alcoholic and Frozen sectors.

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