By James Davey
LONDON (Reuters) – British grocery inflation eased to its lowest rate for 15 months heading into October, industry data showed on Tuesday, providing more relief for shoppers hurt by high prices and for the government whose key economic pledge is to bring inflation down.
Market researcher Kantar said annual grocery inflation was 11% in the four weeks to Oct. 1, down from 12.2% in its September report.
“Grocery price inflation is still very high, but shoppers will be relieved to see the rate continuing to fall,” Tom Steel, Kantar’s strategic insight director, said.
“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.”
All of the country’s major supermarket groups have cut the prices of essential products in recent months.
Market leader Tesco said last week it had reduced the prices on 2,500 products in its first half and predicted food inflation would continue to fall in the second.
But prices of some products are still rising. Kantar said they are rising fastest in areas such as eggs, sugar confectionery and frozen potato products.
The Kantar data going into October provides the most up-to-date snapshot of UK grocery inflation. Official data published last month showed overall inflation in August was 6.7%, with food inflation at 13.6%.
Its recent downward trajectory is being closely watched by consumers, the Bank of England as it considers interest rates, and lawmakers, given that Prime Minister Rishi Sunak has promised to halve overall inflation in 2023 ahead of a probable national election in 2024.
Kantar said grocery sales rose 9.1% in the four weeks to Oct. 1 year-on-year.
The joint warmest September on record boosted sales of traditional summer favourites, with volume sales of ice cream, burgers and dips up by 27%, 19% and 10%, respectively.
Separate surveys published on Tuesday by the British Retail Consortium and Barclays showed consumers held off on much of their nonessential spending last month as rising prices for motor fuel compounded the broader hit from the high cost of living.
UK supermarkets’ market share and sales growth (%)
Market share Market share % change in
12 wks to 12 wks to sales
Oct. 1 2023 Oct. 2 2022 (yr-on-yr)
Tesco 27.4 27.0 9.2
Sainsbury’s 14.8 14.7 9.1
Asda 13.7 14.3 2.9
Aldi 9.9 9.3 14.9
Morrisons 8.6 9.0 2.1
Lidl 7.6 7.1 15.2
Co-operative 6.1 6.4 3.3
Waitrose 4.6 4.7 5.3
Iceland 2.2 2.3 2.8
Ocado 1.7 1.6 9.6
Source: Kantar
(Reporting by James Davey in London; Editing by Matthew Lewis)
