Grocery inflation continues to drop

Grocery price inflation has fallen to 3.2 per cent over the four weeks to 14 April, marking the fourteenth monthly drop in a row, according to new figures from Worldpanel by Kantar. 

The decline has been aided by a significant increase in promotional spending, with items bought on offer making up 29.3 per cent of supermarket sales – the highest level outside of Christmas since June 2021.  Overall take-home grocery sales rose by 3.3 per cent this month.

Fraser McKevitt, head of retail and consumer insight at Worldpanel by Kantar, comments, “We’ve been monitoring steady annual growth in promotions over the past 11 months as retailers respond to consumers’ desire for value.  Deals helped shoppers save a massive £1.3 billion in the latest four weeks, almost £46 per household.  This emphasis on offers, coupled with falling prices in some categories like toilet tissues, butter and milk, has helped to bring the rate of grocery inflation down for shoppers at the till.”

An early Easter didn’t dent seasonal sales, as spending on confectionery topped £100 million for the first time ever in the seven days up to and including Easter Sunday.  Fraser McKevitt continues, “Higher prices have played a role in reaching that record spend figure, but the number of chocolate eggs sold in the seven days to Easter was also 3 per cent higher this spring than last, with 37 per cent% of consumers buying one in that week. Hot cross buns were even more popular, enjoyed by 45 per cent of Britons.

“The growth in confectionery also reflects a broader trend towards snacking in British diets. Over the past decade, there’s been an increase in almost all types of snacks. Consumers munched on chocolate confectionery 93 million more times in the year to June 2023 than in the twelve months to June 2013.  Fruit has also bumped up the list of Britain’s snack choices – 314 million more pieces of fruit were eaten between meals in 2023 than in 2013.”

With the Easter celebrations over, both shoppers and retailers will now be looking ahead to the two bank holidays in May.  Excluding the Coronation, the weeks before the two standard long weekends in May 2023 saw an average increase in sales of £82 million, representing a 3 per cent uplift in spend.

Ocado was again the fastest growing grocer this month, improving sales by 12.5 per cent in the 12 weeks to 14 April, ahead of the total online market which grew by 6.8 per cent. 

Britain’s two largest grocers, Tesco and Sainsbury’s, both gained 0.4 percentage points of share in the latest 12 weeks, holding 27.4 per cent and 15.3 per cent of the market respectively. Sainsbury’s’ sales increased by 6.8 per cent and Tesco grew by 5.9 per cent. 

Lidl achieved a record 8.0 per cent share of the market while fellow discounter Aldi reclaimed the 10.0 per cent market share it last held in September 2023, increasing sales by 2.8 per cent. 

Morrisons held its portion of the market flat at 8.7 per cent, the best share performance for the retailer since 2021, with spending through its tills up by 3.8 per cent. Waitrose and Iceland also retained their market share positions at 4.5 per cent and 2.2 per cent respectively. Asda now holds 13.4 per cent of the market, while Co-op accounts for 5.4 per cent.