Gillian Swaine, London Office, Bord Bia – Irish Food Board

Soaring inflation and declining disposable income has seen UK shoppers cutting back on staple products such as tea, bread, cheese, breakfast cereals, fruit juice and pasta. Volumes sales of grocery good have fallen 3.2% year on year, according to The Grocer’s Top Product Survey 2012, while value sales have risen by 3%, suggesting that shoppers are buying fewer grocery products than a year ago and paying more for them. Of the 92 categories covered in the Grocers Top Product Survey, 78% have dropped in volume.

Some of the categories that have been hit the hardest are breads, with sales down 3.5%, cheese and pasta down 2.6%, tea fell 1.8% in value and 3.3% in volume terms. The breakfast market has been hit particularly hard with the cereals category down 1.45% in volume terms, and juices volume sales down 3.9%. Traditional breakfast food have lost out to eating meals at work or on the go, however this has driven strong growth in breakfast pots. Out of home eating has also boosted the instant pot snacks category which has grown more than any other area of grocery in the past year, up 12.7% in value terms and 8.4% in volume.

While consumers are still shopping promotions and redeeming coupons, (according to The Grocer, 94% of consumers wait to see which chain is offering the best promotions before deciding where to shop before Christmas for example) there is still room for spend on ‘affordable luxuries’ - chocolate confectionary is one of the few categories in both volume and value growth, sharing bags have also seem strong growth in the UK market.