According to market researchers Kantar Worldpanel, Brexit-induced inflation has seen the price of everyday goods rise 2.3% compared to this time last year, and rising prices cost the average household an additional £21.31 during the past 12 weeks.
At first glance, that's no problem for the London-listed supermarkets because inflation tends to drive consumers to cheaper alternatives, such as own label products. Kantar reckons market-wide sales of own label lines in Britain are up almost 5% for the 12 weeks ending 26 March.
However, the big supermarkets are back to losing market share in an outcome that suggests the long-term trend remains down - for the supermarkets' businesses and for their share prices.
I can't imagine an inflationary environment helping the big supermarket chains to fight off disruptive competition from deep-discounting rivals because inflation driving consumers to cheaper alternatives. I reckon inflation will only heap more problems onto the shoulders of the supermarket giants.
The threat is real. Despite grocery sales up 1.4% for the whole country compared to the equivalent period a year ago, over the last 12 weeks, Tesco's sales slipped 0.4% and the firm's share of Britain's grocery market dropped by 0.5%. Tesco still commands a market share around 27.6% but it is shrinking.
Meanwhile, Asda's sales bumped down 1.8% over the period and Sainsbury's dropped 0.7%. Morrisons managed to grow sales by 0.3% but that wasn't enough to stem a 0.1% decline in the company's market share, leaving the firm with 10.4% of the nation's grocery shop.
Smaller competition continues to eat the big supermarkets' lunches. Co-op pushed sales up 0.8% compared to a year ago and Waitrose by 0.3% taking its market share to 5.1%, up from just 4% in 2009 - these are established trends that show little sign of slowing, yet the biggest threat comes from the discounting chains.
Lidl's sales shot up 15%, increasing its share by 0.5% to 4.9% of the overall market. Aldi grew sales by 14.3%, taking its share to 6.8%. These discounters have now grabbed 11.7% of the total market and Kantar reckons ongoing expansion by both firms attracted 1.1m more shoppers over the period. Meanwhile, an upsurge in sales of 9.8% puts Iceland into sharp focus too, as fresh and chilled lines drive improved performance. Such rapid and consistent growth from these discounters must be worrying shareholders of Tesco, Sainsbury's and Morrisons by now.
Swimming against the tide
As investments, I reckon the London-listed supermarkets are too dangerous. The rise of inflation, and Kantar Worldpanel's ongoing narrative of evidence that the tide is against Tesco, Sainsbury's and Morrisons, makes these once-attractive cash-cows susceptible to downside risks that could drive their share prices lower as the year unfolds.
That's why I'm avoiding their shares in favour of firms operating in less challenging sectors.
What you can do
The big supermarket chains strike me as being in long-term decline and the effects of the Brexit process look set to hasten events along. But there are things we can do as investors to mitigate the dangers Brexit throws up, which our analysts set out in this useful and well-researched report.
If the Brexit process makes you nervous, as it does me, grab hold of your copy of Brexit: Your 5-Step Investor's Survival Guide. You'll find the tips inside useful as we navigate through the uncertainties of the next few years. To download the report right now, free of charge, click here.
Kevin Godbold has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.