Shoppers adjusting to rising grocery inflation
UK Grocery price inflation has hit a record high of 17.1% which is having a significant effect on the way Brits shop. Kantar₁ report that UK households face an additional £811 on their annual shopping bills if they don’t make changes to their shopping behaviour, which has prompted some major shifts in the market. Many consumers are making the switch to Own Label to save money – sales of Own Label are +13.2% in February compared to Branded growth of +4.2%. Many are switching stores to the Discounters – Aldi and Lidl are once again the fastest growing retailers with +26.7% and 25.4% respectively. More concerning is that many are simply buying less – grocery volumes are in decline as shoppers seek to offset rising costs.
Challenges for the UK Bread sector
Inevitably the UK Bread market faces significant challenges in the face of these inflationary pressures. Whilst Mintel₂ report that bread buying is almost universal in the UK with 97% of households buying it, frequency of consumption is where the challenge lies: 44% of consumers claimed to eat Packaged Bread at least once a day in 2021 compared to 39% in 2022. So it seems that many of those people who turned to bread during the pandemic have been lost as life has returned to normal, which presents a risk to long term volume in the sector. Despite this, there is reason for a degree of optimism!
Opportunities for the sector
61% of consumers claim that Own Label bread tastes just as good as Brands. Many are finding it relatively easy to make the switch into OL which is evident from market data: Own Label accounts for 38% share of Pre-Packaged Bread (+3ppts vs 2021) and 57% of Speciality Bread & Rolls (+1ppt), meaning Brands will need to work harder than ever to secure consumer loyalty.
40% claim that concerns about carb intake is prompting them to reduce the amount of bread they eat. However there is growing consumer interest in the health benefits of bread, whether it is fibre, vitamins, minerals or even gut health, which signals a huge opportunity for both product development & consumer education from manufacturers, brands & retailers.
46% of consumers consider premium bread to be an affordable treat. According to IGD₃ in 2022 eating out (foodservice) accounted for 27% of the UKs food & drink market compared to 37% pre-pandemic, which highlights the importance of the grocery sector when it comes to inspiring shoppers looking to dine at home.
Bread holds broad appeal for consumers
Bread has long held an important role in the diet of most of the households in the UK. During these times of financial uncertainty there is a clear opportunity for the sector to meet shifting needs of consumers at both ends of the spectrum.
With versatile products such as the Inventis range of mixes, Baking With Lesaffre provides a variety of creative solutions for customers seeking unique bakery products and offering solutions for product practicality as well as product premiumisation.
Data Sources: ₁ Kantar 12 w/e 19 Feb 2023, ₂ Mintel UK Bread Report 2022, ₃ IGD 2022
Header image by Vicky Ng on Unsplash
