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British Shoppers Stock Up on Frozen Food in Bid to Save Money

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British shoppers are adopting a new strategy to try to stretch their weekly groceries: switching to long-lasting goods.

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(Bloomberg) — British shoppers are adopting a new strategy to try to stretch their weekly groceries: switching to long-lasting goods. 

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Tesco Plc’s customers are buying more frozen vegetables, fish and pizza lately. Some shoppers at the UK’s biggest grocer are also shifting from fresh pasta to dry, and from chilled soup to canned. Rivals from J Sainsbury Plc to Iceland Foods observed a similar trend. 

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Consumers facing mounting grocery and energy bills are forced to get creative, and the shift toward items that can be cheaper and less wasteful comes as they embrace discounters and supermarkets’ own-label goods rather than big brands. 

“People are very mindful of value,” Richard Walker, managing director at Iceland, the budget supermarket, said in a telephone interview. “Frozen food is cheaper and there’s less waste — and budgets are very squeezed now.”

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At Sainsbury, frozen vegetables, pies and meats appear particularly popular. Iceland’s sales of frozen foods, meanwhile, are outperforming chilled. More broadly, sales of frozen vegetables are up 10% on a year ago, outstripping the 6% gain in fresh vegetables, according to data from the analytics firm Kantar.

British consumers are grappling with the highest inflation in four decades. Grocery-price inflation hit almost 14% earlier this month, Kantar says, the highest level since it started tracking the data in 2008. 

Fraser McKevitt, head of retail and consumer insight at Kantar, says there could be “more of a move” toward frozen foods ahead, although he doesn’t expect a revolution. He noted that canned goods are also proving more popular for similar reasons, with sales up about 6% in value terms.

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Changing Perception 

“People can buy in bulk in one go and they don’t need to throw any of it out,” McKevitt said in a phone interview. 

Traditionally, British consumers have turned their noses up at frozen offerings, unlike in France where the frozen food chain Picard supplies household staples. 

“Birdseye and Iceland have been trying to shift the needle for years,” said Kien Tan, retail strategy director at the accounting and audit firm PwC. “There is a perception issue around frozen food.” 

But the timing may be right for a change of heart. A study commissioned by Iceland Foods in 2018 showed that most families found frozen food offered about 30% better value than fresh, and cut food waste by almost half. 

Even if the trend endures, supermarkets are unlikely to increase the space they devote to frozen goods. Not only do they make a lot of their profit margins in chilled options, but at a time when energy costs balloon, running more freezers can get costly.

Iceland Foods already saw its debt drop further into distressed territory in August after Moody’s Investors Service cut its credit rating. The company is especially exposed to refrigeration costs for its predominantly frozen food products, and Moody’s said its electricity bill will more than double in the financial year to March 2023. 

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