Britons spend an extra £1bn as UK supermarket sales grow at fastest pace in over three years

UK supermarkets enjoyed an Easter to remember, with sales rising at the fastest pace in over three years, but inflation in the grocery market could rise even further, figures released on Wednesday (3 May) by Kantar Worldpanel showed.

According to data from the industry research group, sales in supermarkets across Britain rose 3.7% year-on-year in the 12 weeks to 23 April, the fastest rate of growth since September 2013 as consumers forked out approximately £1bn more than in the corresponding period in 2016.

British shoppers splashed out £325m on Easter eggs with almost three quarters of the population buying at least one, with the average price paid for an Easter egg rising by 8.6% to £1.65.

"All 10 major retailers are in growth for the first time in three-and-a-half years, when we last saw like-for-like grocery inflation as high as it is now," said Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel.

"While prices do look set to rise further, the current inflation rate of 2.6% is still below the average level experienced by shoppers between 2010 and 2014."

Tesco returned to growth with sales up 1.9% after sales were hit last period by a late Easter, as its own label sales increased by 6%, growing across all price tiers, while Sainsbury's sales rose 1.7%, recording the largest increase since June 2014.

Morrisons was the fastest growing of the industry's "Big Four", thanks to huge growth in its own premium label lines, although the retailer's market share slipped 0.2 percentage points to 10.4%.

Meanwhile, sales at Asda returned to growth for the first time since October 2014 thanks to a quarter of a million additional shoppers and a strong performance online, though its overall share fell by 0.4 percentage points to 15.6%.

Iceland, Aldi and Lidl, saw sales rise by 9.3%, 18.3% and 17.8% respectively and all grew ahead of the market, with the two discount chains achieving new record high market shares of 6.9% and 5.0%.

Waitrose's share, meanwhile, was stable at 5.2% despite a 3.1% increase in sales and at Co-op sales rose by 2.6% while market share fell by 0.1 percentage points to 6.1%.

Ocado's sales grew 10.8%, the third-fastest rate of all UK supermarkets and considerably ahead of the overall online grocery market, which currently has a growth rate of 7.8%. The company has doubled its share since late 2014 and now accounts for 1.3% of supermarket sales.

"While fewer than 3% of British households have shopped with Ocado in the past 12 weeks these consumers are considerably more affluent than average, meaning the retailer performs well in high-value categories," added McKevitt.

Meanwhile, a separate report from the British Retail Consortium (BRC) showed that food prices increased 0.9% from a year earlier following a 1% increase in March.

Overall shop prices were down 0.5% in April following a 0.8% decline in March, the slowest rate of fall in the index since November 2013.

Shop prices have now fallen for four consecutive years, with the BRC saying that competition among retailers was keeping prices depressed.