Grocery inflation falls for seventh straight month

British grocery inflation eased to its lowest level since July 2022 heading into October, industry data showed on Tuesday, providing some relief for consumers hurt by high prices and for the government, which has pledged to bring prices down.

Market researcher Kantar said annual grocery inflation was 11 per cent in the four weeks to 1 October, down from 12.2 per cent in its September report.

Take-home grocery sales over the same period rose by 9.1 per cent compared with last year, Kantar data showed.  

“Grocery price inflation is still very high, but shoppers will be relieved to see the rate continuing to fall,” Tom Steel, strategic insight director at Kantar, commented.

“For the first time since last year, the prices of some staple foods are now dropping and that’s helping to bring down the wider inflation rate. Dairy was one of the categories where costs really shot up last autumn but the average price paid for a 250g pack of butter is now 16 pence less than 12 months ago.”

 A jump in the amount of money spent on offers is also helping to offset the impact of inflation, Steel explained.

“Supermarkets are looking at all the different ways they can deliver value at the tills and while the emphasis for some time has been on everyday low prices, the retailers are starting to get the deal stickers out again,” he said, noting that spending on promotions made up over a quarter of all sales in the latest 12 week period at 26.5 per cent, the highest level since June 2022.

Lidl was the fastest growing retailer this month with sales up 15.2 per cent.  This is the first time that Lidl has led the pack since April and the growth means it now has a market share of 7.6 per cent, up 0.5 percentage points year on year. Fellow discounter Aldi’s sales were up by 14.9 per cent, with its total share of the market now at 9.9 per cent, up by 0.6 percentage points compared with a year ago.

Tesco saw sales rise by 9.2 per cent over the latest 12 weeks, with its market share edging up by 0.4 percentage points to 27.4 per cent. Sainsbury’s share grew to 14.8 per cent as its sales increased by 9.1 per cent compared with last year.  Asda and Morrisons now hold 13.7 per cent and 8.6 per cent of the market.

 Amid reports that Waitrose could become the latest retailer to partner with Amazon for grocery delivery services, total online trips increased year-on-year for the first time this month since December 2021 by 3.1 per cent. Waitrose has a 4.6 per cent share with sales growth at 5.3 per cent for the latest period.

Co-op’s market share sits at 6.1 per cent with sales up 3.3 per cent.  Iceland’s sales rose by 2.8 per cent, and Ocado grew sales by 9.6 per cent to take 1.7 per cent of the market. Symbols and independents saw 2.1 per cent increase in sales during the 12-week period.