Over one fifth of Britons 'struggling' to make ends meet -Kantar

By James Davey

LONDON (Reuters) - Over one fifth of British households described themselves as "struggling" to make ends meet as grocery price inflation hit 7.0% in the four weeks to May 15, its highest level in 13 years, market researcher Kantar said on Tuesday.

It said within the 22% of shoppers struggling financially, the rising price of groceries was of concern to over nine in ten, making it the second most important issue behind the spiralling cost of energy bills.

Kantar said prices were rising fastest in markets such as dog food, savoury snacks and fresh beef, while falling in spirits.

British consumers were hit last month by a double whammy of surging household energy costs and higher taxes, and data published last week showed overall inflation hit a 40-year high of 9.0%. The Bank of England thinks it will climb above 10% later this year.

“People are really feeling the squeeze at the supermarket tills and they’re having to stretch their budgets further to accommodate rising prices," said Fraser McKevitt, Kantar's head of retail and consumer insight.

Kantar said supermarket sales fell 4.4% over the 12 weeks to May 15 year-on-year and were down 1.7% over the last month.

It noted that German-owned discounters Aldi and Lidl were the fastest growing grocers over the 12 weeks with sales up 5.8% and 6.0% respectively, giving a record combined market share of 15.9%.

Market leader Tesco performed ahead of the wider market increasing its share by 0.4 percentage points to 27.4%.

Last month, Tesco and No. 2 Sainsbury's both warned of lower profit this year.

Despite the squeeze on budgets, Kantar said the Queen's Platinum Jubilee is expected to produce bumper supermarket sales, with alcohol, soft drinks, barbeque foods, and desserts expected to be particularly popular over the June 2-5 long weekend.

It noted that the Diamond Jubilee in 2012 saw a 10% boost in supermarket sales during the week leading up to the festivities.

Market share and sales growth (%)

(Reporting by James Davey; Editing by Aurora Ellis)