In the month that prices at the petrol pumps soared, the supermarkets pushed through another round of price increases at the checkout after a lull in March.
Average prices at the big four increased by 0.74% over the four weeks to 24 April, according to The Grocer Price Index, compiled by BrandView.co.uk. After prices barely changed in March, the increase signifies a return to the sort of price hikes seen in the first two months of the year.
The supermarkets, already under pressure from the commodity price rises, have had to react to a spike in oil prices and the likelihood of drought in 2012. The upshot is that annual inflation across the supermarkets is now running at 4%.
Sainsbury’s increased prices the most in April - by 1.1%. Its annual inflation was also the highest of the big four at 5%. Despite the price increases, the supermarket managed to maintain the same 16.6% market share reported last month for the 12 weeks to 15 April, according to Kantar Worldpanel data published this week.
UK butter production rose by 9.3%, to 130,850 tonnes in the 12-month period to the beginning of February 2012, compared with the same period the year before, latest data from DairyCo shows. It equates to an additional 11,090 tonnes of butter on the market.
With increased supply, the price of UK butter has crashed by 38.5% year-on-year, to £2,212.5 per tonne [Mintec]. The month-on-month fall (22.4%) has not been so acute. However, with butter production in February this year up by 34.6%, or 3,000 tonnes, compared with February last year, there could be further price falls to follow.
All egg prices shown, both in the EU and UK, have shot up year-on-year as a result of the squeeze on supply caused by January’s battery cage ban. The highest riser has been UK shell eggs, up 89.7%. However, prices have eased month-on-month, with UK shell eggs showing a 32.5% increase but shell eggs for processing in the EU falling by 31.3%.
Asda took the crown for keeping the tightest lid on annual inflation - at 2.5%. However, that was achieved thanks to efforts to keep prices down in the second half of 2011 as month-on-month it actually bumped prices up 0.9%.
Its rivals Tesco and Morrisons both increased prices by just under 0.5% month-on-month. Of the two, Tesco did a significantly better job of keeping base prices - which factor out promotions - under control. The supermarket, which has focused the Big Price Drop initiative on base prices, barely increased them at all while Morrisons put them up 0.7%.
The signs are that Tesco’s pricing campaign is starting to produce results. Although its year on year market share is down, its 12-week share leapt from 30.2% in March to 30.7% this month while Morrisons, which disappointed the city with its Christmas sales after an otherwise exemplary 2011, saw its share fall 0.4 percentage points to 12.3% [Kantar].
The only supermarket to buck the upward price trend over the month was Waitrose, which slashed prices by 1.63%. The cuts were driven by promotional activity as base prices were down by only 0.45%. The biggest were in frozen, fruit and veg, and baby products. Parents, especially, benefited from the lower prices as baby product prices were slashed the most - by 12% month-on-month.
Waitrose pushed through the cuts despite falling margins - in March it announced that full-year operating profits had dropped even after a 7.9% leap in sales, excluding VAT, to £5.07bn. Its investment in pricing continues to win customer support as its 12-week market share rose 0.1 percentage points to 4.5% this month [Kantar].
No comments yet