Ice cream wins with supermarkets but Brexit economy is melting

Hardly a surprise that ice cream was the big winner in Kantar Worldpanel’s latest supermarket sweep. Sales rose 34 per cent over the 12 weeks to June 18, according to its latest snapshot of the grocery market.

But what about the serious stuff – overall sales, prices rises – and what the data shows about the state of a nation of shopkeepers? And shoppers?

It all depends on whether your see your ice-cream cone as half full or half eaten.

One year on from the disaster of the EU referendum, and amid the increasingly baleful economic news stemming from it, there is a chink of light for the half-full brigade.

The pound’s slump brought inflation roaring back, but Kantar’s survey, which covers 75,000 products in proportions purchased by shoppers, shows the latter might be moderating, at least as far as the big supermarkets are concerned. Price rises are no longer accelerating.

Unfortunately, prices are still rising, and by 3.2 per cent in June. Those of us with half-eaten ice creams can therefore continue to point to the fact that if your household budget is stretched and your wages aren’t rising to cover the increase, you’ll still be struggling. That, sadly, is a situation that too many Britons find themselves in.

Kantar’s data shows it is reacting to this by seeking value. Lidl, the discounter, is the fastest growing of the big grocers. It turned in a sales increase of 19.4 per cent, the strongest growth the German outfit has recorded since October 2014. It was closely followed by its shadow sibling, the similarly price-competitive Aldi, which recorded a 17.9 per cent rise.

Both increased their respective market shares, but they still only account for 12 per cent in total, so there’s a lot for them to shoot for.

When it comes to the traditional big four supermarkets, they were all fairly close in terms of growth (with the exception of laggard Asda) but the nature of spending with them is where it gets interesting.

Own label products now eclipse brands – accounting for 51 per cent of total sales. While premium lines were the fastest growing sub section, pricey brand names were still outgunned by more humble fare in terms of growth.

All of this suggests value conscious shoppers are focussed upon making stretched budgets go further, and a good thing too, because there is a sting in the economic tail to all this courtesy of the Bank of England.

It isn’t only inflation outpacing wages that is squeezing household budgets: debt is playing a role too.

You’re going to have to economise on your groceries if you have repayments to make, and the Bank of England is becoming increasingly alarmed at the number of people in that position.

Outstanding car loans, credit card balances, personal loans have increased by 10 per cent over the past year. Household income has risen by just 1.5 per cent. You can see the problem there.

The Bank’s financial stability director Alex Brazier has warned that high street banks risk entering a “spiral of complacency” when it comes to unsecured lending. That is basically what they were doing in the run-up to the financial crisis, memories of which are now (disturbingly) showing signs of fading.

Mr Brazier says the Bank stands ready to take action if its charges fail to rein in their activities. The old lady of Threadneedle Street isn’t as forgetful as they are.

He might need to make good on that. Britons might be becoming savvier shoppers but they’re not showing similar smarts when it comes to their household budgeting.

That could prove to be very dangerous given an economy that looks, thanks to Brexit, like it’s teetering on the brink of something nasty.

Sorry if that leaves your ice cream feeling like it has melted, but there you are.