Lower grocery prices hurt fruit and vegetables

Figures from market analysts Kantar Worldpanel show that in almost every fruit and vegetable category the average retail price has fallen in the last year by 8%, the exception being soft and tropical fruit. These lower prices have taken £397 million of sales out of the fresh produce category in 2015.

Kantar’s consumer insight director, Chris Cowan, says that this deflation is really hurting the vegetable category. “Veg has been struggling, driven by poor performance in the potato and salad categories,” he says. Potatoes prices have fallen by 13%, root crops are down by 9.8%, brassicas 9.1% and salads 7.8%.

To emphasise what is happening, Kantar single out lettuce sales. Following moves by Tesco, all major retailers have dropped their price for iceberg lettuce in an attempt to chase the prices offered by Aldi and Lidl.

Chris Cowan said: “Lettuce is now as cheap as 39p-60p across the main retailers and discounters. There was a massive spike in sales at Tesco when the price was cut to 39p with sales going from 7.1 million to 10-13 million units. But the value of those sales has gone down from £5.9 to £5.1 million. He says that it is the same scenario at Asda, only their sales are worth a little more, and at Sainsbury’s also where lettuce unit sales have gone from 3.1 million to 4.4 million units but value has dropped from £2.9 to £2.6 million. “The big four are selling less and earning less – it’s more work for less gain.”

Chris Cowan states strongly: “Despite the government wanting us to eat more fruit and veg – we’re not. Price isn’t having a huge impact on sales whether it goes higher or lower. Price alone is not the key driver of sales.”

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