UK Grocery Inflation Hits 17.1% and Supermarkets Make Loyalty Push 

As United Kingdom food prices skyrocket, grocers are doing everything they can to retain customers.

The country’s grocer inflation rate rose to 17.1% year over year in the four weeks leading up to Feb.19, the first time the figure has surpassed 17%, as Kantar reported Tuesday (Feb. 28). Sales have not nearly been keeping pace with inflation, growing just 8.8% in the same period.

This price increase is even higher than the already abnormally steep grocery inflation across the Atlantic in the United States. U.S. Bureau of Labor Statistics (BLS) data revealed that grocery prices increased 11.3% year over year in January.

With this disparity, British grocers are feeling even more pressure to offer deals to keep consumers coming back than their American counterparts. According to PYMNTS’ study “Big Retail’s Innovation Mandate: Convenience and Personalization,” created in collaboration with ACI Worldwide, which drew from a survey of 300 retailers across the United States and the United Kingdom, three-quarters of grocers think consumers would be very or extremely likely to switch merchants if digital coupons and rewards were not provided.

Yet, U.S. merchants are not as convinced about the effectiveness of these offers as their U.K. counterparts. The study found that 81% of U.K. merchants believe in their importance, compared to a smaller 74% of U.S. merchants.

Indeed, adoption of these kinds of digital deals is also higher in the U.K. than it is in the U.S. According to data from PYMNTS’ study “What U.K. Consumers Expect From Their Grocery Shopping Experiences,” also created in collaboration with ACI Worldwide which drew from a survey of more than 2,500 U.K. consumers about their grocery shopping habits, 63% of the country’s residents are members of grocery store loyalty programs. In contrast, only 54% of Americans surveyed said the same. In addition, 44% of UK shoppers said they would spend more at a grocery that offered a loyalty program.

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