UK seafood sales drop on record inflation
Seafood sales in grocery stores in the United Kingdom dropped 8.3 percent for the quarter ending 20 March, primarily due to the impacts of price increases caused by inflation, according to research firm Kantar.
However, retail seafood sales are holding strong versus meat and poultry, and were up 5.6 percent versus the same quarter in 2021.
Monthly grocery-price inflation reached 5.9 percent, its highest level since December 2011, according to new data released by Kantar. Inflationary pressures, worsened recently by the war in Ukraine, resulted in a 5.9 percent decline in grocery sales for the quarter ending 17 April.
“The average household will now be exposed to a potential price increase of GBP 271 [USD 341, EUR 322] per year,” Kantar Head of Retail and Consumer Insight Fraser McKevitt said. "A lot of this is going on non-discretionary, everyday essentials which will prove difficult to cut back on as budgets are squeezed. We’re seeing a clear flight to value as shoppers watch their pennies.”
The sub-categories with the largest declines in the chilled seafood department were battered (down 15.1 percent), breaded (down 15.2 percent), smoked (down 12.6 percent), shellfish (down 11.3 percent), and natural (down 11.2 percent). Added-value fish was the only item within the category that had a sales increase, rising 4.3 percent versus the same quarter of 2021 and 14.4 percent versus 2022.
Still, chilled seafood is performing well versus fresh primary meat and poultry, which realized a sales drop of 13.1 percent in the first quarter versus the same quarter last year. Lamb has overtaken beef as the fasting inflating protein in the market, according to Kantar, rising 9.3 percent, while beef prices rose 6.7 percent.
Meat and poultry sales are declining because Britons feel more comfortable eating in restaurants and getting back to the office, so reliance on at home meals has declined, Kantar said. The number of trips into grocery stores to buy meat and poultry has fallen by 9.8 percent compared to last year, with basket sizes dropping by 7 percent.
“It is to be expected that sales are down compared with last year, when restrictions were still in place,” McKevitt said. “While the number of trips we’re making to the supermarket has remained steady this year, people aren’t buying as much when in store and the average basket size has dropped by 4.5 percent.”
Online grocery sales fell nearly 15 percent in the first quarter, according to Kantar.
“While online shopping is definitely here to stay, it’s less of a necessity now. Shopper confidence about heading out and about and getting back to store has gone up and half a million fewer households bought over the internet compared with last year,” McKevitt said.
The level of grocery products bought on promotion, dropped 2.7 percent to 27.3 percent in Q1, as grocers employ everyday low-pricing strategies.
“The major retailers are listening to shoppers’ concerns, with Asda launching its Just Essentials line, Morrisons announcing that it is cutting the price of many everyday goods, and Tesco locking in savings through its Clubcard strategy,” McKevitt said.
Britons are increasingly shopping at discounters, Kantar found. Aldi was the fastest-growing retailer in the quarter ending 17 April, sporting a sales increase of 4.2 percent by value. Lidl’s sales rose 4 percent.
“Over one million extra shoppers visited Aldi and Lidl respectively over the past 12 weeks compared with this time last year,” McKevitt said. Collectively, the two discounters account for 15.4 percent of the market, up from just 5.5 percent a decade ago.
Aside from the discounters, Tesco was the only other retailer to gain market share in the first quarter, growing by 0.3 percentage points to hold 27.3 percent of total grocery sales. Sainsbury’s accounts for 15 percent of the market, followed by Asda at 14 percent and Morrisons at 9.5 percent.
McKevitt said the war in Ukraine has increased public awareness of supply pressures and there was evidence of some stocking up as consumers prepared for limited availability along with higher prices, according to Kantar. For example, several grocers recently introduced restrictions on cooking oil purchases as concerned consumers filled up their cupboards, McKevitt said.
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