Shopper confidence falls as Brits expect food inflation to climb
Surging food inflation has dented Brits’ confidence at supermarkets, with many expecting food prices to climb even further, according to new data.
Inflation at the grocers hit five per cent in the four weeks ended August 10, down from 5.2 per cent in the previous month but well above the wider UK rate of 3.6 per cent.
Shopper confidence fell for the third consecutive month to -1, according to the British Retail Consortium (BRC).
“The emotional weight of rising energy bills and fears of tax hikes in the Autumn Budget are adding to the strain, especially as unemployment ticks upward,” Sarah Bradbury, CEO of IGD, said.
Worldpanel has estimated that Brits’ average household spend at the grocers has now reached £5,283 a year, a figure which could rise by £275 by the end of the year.
Rising prices have been driven by a combination of factors, including falling a higher incidence of disease amongst livestock, a shortage of carbon dioxide, unstable weather patterns and higher taxes.
But Bradbury said there are “glimmers of relief”.
“Interest rates have been cut again, and mortgage rates are easing, offering some financial respite.
“While volumes remain under pressure, financially resilient shoppers may remain more confident, even as they brace for a challenging winter,” she said.
Retail sales rise over summer
In the UK, total retail sales increased by 3.1 per cent year on year in August, against a growth of one per cent in August 2024.
Data from Adobe similarly shows UK shoppers spent £10bn online in August, up 2.2 per cent year on year, with the strongest growth in furniture and home goods.
UK Head of Consumer, Retail & Leisure at KPMG, Linda Ellett, attributed the boost to “moderate growth in the housing market” helping to continue the upturn in home-related purchases.
“Home appliances, accessories, and DIY and garden goods all saw sales growth in August… new product launches also boosted mobile phone sales, with computing related purchases rising ahead of the new school year,” Ellet said.
She added that retailers have already started to prep for Christmas, “reflecting upon their summer performance” as they plan their stock levels for the final ‘golden’ quarter of the year.