Average prices in canned goods have fallen with fish, soup and tomatoes feeling the squeeze. But, with inflation reported elsewhere in grocery, are price rises on the horizon?
Canned goods are feeling the squeeze as average price falls 2.4% [Kantar 52 w/e 1 January 2017].
“In the latest year we’ve seen the largest levels of price deflation in canned soup, canned fish and canned meats,” explains Kantar Worldpanel analyst Will Sohler. Prices in these categories are down 4.1%, 3.9% and 4.3%, respectively.
Fish and soup have seen the biggest value losses of any canned subcategory with a combined £43.7m wiped off sales despite negligible volume losses for fish and a 2.9% dip for soup.
This, according to Kantar, is driven by the retail price war as well as the rise of the discounters, whose ranges consist largely of own-label offerings, which are notably cheaper than brands.
Even tinned tomatoes, one of the only subcategories in growth, saw a price drop of 2.7%. “Both promotions and the price war have driven prices down,” says Cesare Concilio, joint MD of Cirio UK operations. “Promotional sales have been the key driver of performance, with temporary price reduction sales up by roughly 15.4% in January – volume mechanics have been scaled back. Growth in price reductions has accelerated in recent periods, with growth in off-deal sales slowing down.”
However, the curtain is falling on deflation with supermarket-wide shelf prices on the rise for the first time in two-and-a-half years.
Baked beans have been dubbed a victim of Brexit with prices up 2%, according to Brand View analysis. Shoppers could face further price hikes due to currency fluctuations.
“In light of volatile commodity prices, it is difficult to predict the future in terms of value, although some price inflation is likely due to a rise in raw material costs and exchange rate fluctuations post the referendum vote,” believes Neil Brownbill, marketing director for Princes.
This doesn’t have to be a bad thing, notes Sohler. “As prices increase, people are likely to cut back on non-essentials and move towards cheaper substitutes. Canned goods could reap the benefits of this as they are usually much cheaper than fresh alternatives.”
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10. Price crunch: canned prices get squeezed 2.4%