Tesco says that new employer taxes and regulatory costs were adding to inflationary pressure
International news via Reuters:
British grocery price inflation rose to 4.7% for the four weeks to June 15, its highest level since March last year, dealing another blow for low-income households, data from market researcher Kantar showed on Tuesday.
The figure, which compared to 4.1% in last month’s report, was driven by price rises in products such as chocolate, butter and meat, Kantar said.
Market leader Tesco said earlier this month that new employer taxes and regulatory costs were adding to inflationary pressure at a time when commodity prices were rising.
Industry researcher the Institute of Grocery Distribution has forecast that food inflation could hit nearly 5% this year.
Data from Asda and the Centre for Economics and Business Research, published on Monday, showed that while average real disposable income is rising in the UK, the lowest-earning 40% now have less spending power than they did in 2021.
“Consumer concerns over price are continuing, and this is reflected in the figures. Sales of own label ranges grew at 4.2% this month, ahead of branded lines, as shoppers looked to balance their budgets,” Fraser McKevitt, head of retail and consumer insight at Kantar, said.
Kantar said grocery sales in value terms increased 4.1% year-on-year over the four weeks, helped by warm weather.
However, it said when inflation was taken into account grocery volumes fell 0.4% – the first year-on-year decline this year.
Tesco, number two player Sainsbury’s, discounter Lidl and online supermarket Ocado were the standout performers over the 12 weeks to June 15 with year-on-year sales gains of 7.0%, 5.7%, 11.2% and 12.2% respectively.
Number three player Asda remained the industry laggard with a sales decline of 1.7%, though its performance is on an improving trend.
Kantar said spending on groceries at cyberattack hit Marks & Spencer rose 12.0%, though the retailer is not included in its market share data set.
UK supermarkets’ market share and sales growth (%)
Market share Market % change in
12 wks to share 12 sales
June 15 2025 wks to (yr-on-yr)
June 16
2024
Tesco 28.1 27.6 7.0
Sainsbury’s 15.2 15.1 5.7
Asda 11.9 12.7 -1.7
Aldi 10.9 10.8 6.5
Morrisons 8.4 8.7 2.2
Lidl 8.1 7.7 11.2
Co-operative 5.3 5.6 -0.7
Waitrose 4.5 4.5 5.5
Iceland 2.3 2.3 1.9
Ocado 1.9 1.8 12.2
Source: Kantar
Reporting by James Davey; editing by Sarah Young and David Evans
