UK retail seafood sales drop due to record-breaking inflation
Chilled seafood sales in the U.K. grocery sector plunged in the quarter ending 15 May, primarily due to record-high price inflation.
Overall chilled seafood sales dropped 11 percent to GBP 489.9 million (USD 601 million, EUR 568 million), according to grocery research firm Kantar.
Sales of all sub-categories of chilled seafood dropped, Kantar said in its latest Meat, Fish, and Poultry report. The largest decline was in battered seafood, with sales down 20.9 percent in the quarter, while sales of breaded items fell 17.9 percent. Smoked fish sales dropped 14.9 percent, shellfish sales declined 13.9 percent, natural sales fell 10.9 percent, and added-value product sales decreased 3.8 percent.
However, sales in the overall chilled fish category grew 6.7 percent compared to the same quarter two years ago, with added-value product sales rising 32.3 percent, according to Kantar.
The major sales declines can be attributed to overall grocery inflation, along with price increases in the seafood department, Kantar said. While prices for fish haven’t risen as quickly as primary meat (up 3.1 percent during the quarter), the rate of increase “is still faster than it has been for some time,” Kantar noted in the report. Kantar did not immediately respond to a request for additional comment from SeafoodSource.
U.K. grocery prices climbed 8.3 percent over the past month to reach their highest level since April 2009, Kantar said in a press release.
As a result, overall supermarket sales fell by 1.9 percent for the quarter ending 12 June, while sales grew by 0.4 percent during the most recent month versus the same period in 2021.
The uptick in inflation shows no signs of slowing, as the average annual grocery bill in the U.K. is on course to rise by GBP 380 (USD 466, EUR 441) this year, according to Kantar.
“This is over GBP 100 (USD 123, EUR 116) more than the number we reported in April this year, showing just how sharp price increases have been recently and the impact inflation is having on the sector,” Kantar said.
Grocery inflation could reach 15 percent this summer – the highest level in more than 20 years – with inflation lasting into the middle of next year, according to grocery trade organization IGD, according to The Guardian.
“We expect the mood of shoppers to remain bleak for the foreseeable future as they are impacted by rising inflation and a decline in real wages. Shoppers are likely to dial up money-saving tactics as far as possible,” IGD Chief Economist James Walton said.
Meat, cereals, dairy, fruit, and vegetables are likely to be the hardest-hit categories in U.K. grocery, according to IGD.
As a result of inflation, shoppers “will be watching budgets closely as the cost-of-living crisis takes its toll,” Kantar Head of Retail and Consumer Insight Fraser McKevitt said.
Already, shoppers have swapped branded items, which have declined by 1 percent in sales for the quarter, for own-label products.
“Sales of these lines, which are often cheaper, have risen by 2.9 percent, boosted by Aldi and Lidl’s strong performances, both of whom have extensive own-label repertoires,” McKevitt said. "We can also see consumers turning to value ranges, such as ASDA Smart Price, Co-op Honest Value and Sainsbury’s Imperfectly Tasty, to save money.”
Store traffic jumped by 3.4 percent over the last month, but online sales fell to its lowest proportion of the market since May 2020 at 12 percent.
“We’re still way ahead of our continental neighbors when it comes to buying groceries online and one in five British households makes an order each month, the highest proportion in Europe,” McKevitt said.
However, online sales have been suffering since the end of the pandemic, according to McKevitt.
“This is the twelfth month in a row they’ve been in decline and digital orders fell by almost 9 percent in June,” McKevitt said.
One bright spot was that, even with record inflation, sales during the week of the Platinum Jubilee – which celebrated Queen Elizabeth II’s 70 years as Britain’s monarch through 5 June – were GBP 87 million (USD 107 million, EUR 101 million) higher than on average in 2022.
“Despite the rising cost of living, the British public got into the jubilee spirit in characteristic fashion,” McKevitt said.
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