The COVID-19 pandemic led many countries to implement social distancing, lockdowns and travel restrictions, which have resulted in a collapse in the world economy unprecedented in peacetime. Although the real-time effects of the ‘Great Lockdown’ on employment and consumer expenditure have been widely documented, much less is known about how the crisis is impacting inflation. In this paper, we use comprehensive scanner data from the United Kingdom to measure inflation for fast-moving consumer goods during the Great Lockdown in real time.
We use household-level data that are collected by the market research firm Kantar FMCG Purchase Panel. The data cover purchases of fast-moving consumer goods brought into the home by a sample of households living in Great Britain (i.e. the UK excluding Northern Ireland). This sample includes all food and drinks (including alcohol), as well as toiletries, cleaning products and pet foods. At any point in time (including over the lockdown), the data set contains purchase records of around 30,000 households. Participating households are typically in the data for many months. Each household records all products (or barcodes) that they purchase using a handheld scanner, and they send their receipts (either electronically or by post) to Kantar. For each transaction, we observe quantity, expenditure, price paid, product characteristics and whether the item was on promotion.
Our data set runs until 17 May 2020. In the UK, lockdown started on 23 March 2020. The availability of historical data enables us to compare inflation in 2020 with preceding years, as far back as 2013. We focus on the period from the beginning of the year to 17 May. Over this period in 2020, we observe 13.4 million transactions and 102,000 unique products. We measure both week-to-week inflation and month-to-month inflation. In the former case, we focus on the 20 seven-day periods starting from 30 December, through to 17 May. For the monthly analysis, we define months as running from the 18th of one month to the 17th of the following month. We focus on the five months running from 18 December to 17 May.