Grocery inflation falls for first time in 21 months

Grocery inflation edged lower in November, the first decline in nearly two years, but remained near record highs, providing little relief for consumers ahead of the key Christmas trading period, industry data showed on Tuesday.

Market researcher Kantar said grocery inflation in the four weeks to Nov. 27 was 14.6 per cent, down 0.1 percentage points from October’s record high, marking the first fall in 21 months.

“Grocery inflation still has a long way to come down though, and based on the current rate, shoppers will have to spend an extra £60 in December to buy the same items as last year,” Fraser McKevitt, Kantar’s head of retail and consumer insight said.

The cost of a traditional Christmas dinner for four has hit £31, up 9.3 per cent year-on-year, McKevitt said.

Prices are rising fastest in markets such as milk, dog food and butter, said Kantar.

It said grocery sales rose 5.9 per cent year-on-year in the 12 weeks to Nov. 27, masking a drop in volumes once inflation is accounted for.

“Sales of mince pies, Christmas puddings and Christmas confectionery are worth 2 per cent more than last year, but this rise can largely be put down to higher prices. If we look at the amount of people buying these items and the overall number of purchases made, then sales are actually down on 2021,” McKevitt.

Kantar highlighted more evidence of the coping strategies shoppers are adopting to mitigate rising costs, with own-label sales now up 11.7 per cent year-on-year and sales of the cheapest value own-label lines up 46.3 per cent.

Also, German-owned discounters Aldi and Lidl were yet again the fastest growing grocers with sales growth over the 12 weeks of 24.4 per cent and 22.0 per cent respectively, which also reflected the opening of new stores.

Morrisons and Waitrose were again the laggards, with sales declines of 4.7 per cent and 1.8 per cent respectively. Symbols and Independents have also seen sales dropping by 3.4 per cent year-on-year.

The number of times people visited the supermarkets hit a new high this period.

“Households went grocery shopping more than 48 times in the 12 weeks to 27 November, that’s the highest frequency we’ve recorded since April 2020. This is largely about the gradual return to pre-COVID behaviours – something we’ve been following for many months,” McKevitt said.

Kantar said its data did not indicate a significant boost to sales from the soccer World Cup, which started Nov. 20.

Separate surveys published on Tuesday by payments processor Barclaycard and the British Retail Consortium showed spending ticked up last month at a rate that greatly lagged behind inflation, underscoring the pressure on household budgets.