Households are continuing to turn to cheaper products after two and a half years of steep price rises, despite the fact that UK grocery price inflation has slowed to its lowest level since 2021, according to research.
Grocery Inflation Hits Lowest Point Since 2021
Sales of wine, beer and burgers rose over the first bank holiday weekend in May despite continued pressure on household budgets, according to retail research specialist Kantar.
It found that the rate of food price inflation fell for the fifteenth consecutive month, to 2.4% - the lowest level since October 2021 - and down from 3.2% in April.
Fraser McKevitt, the company's head of retail and shopper insight, said: "Food price inflation has fallen for the fifteenth consecutive month to 2.4%". "Food price inflation is gradually returning to levels we wouldn't forget as more typical."
However, it is currently 0.8% above the 10-12 month average of 1.6% between 2012 and 2021, i.e. the period before prices started to rise."
Shoppers Prefer Cheaper Own-brand Products
Even though the worst of the cost-of-dwelling disaster is in the back of us, with electricity and meals charges doping up into the double digits, many customers are nevertheless selecting the much less steeply-priced own-label merchandise from supermarkets to be able to store money.
McKevitt said: “After almost and a 1/2 of years of swiftly growing prices, it is able to take a piece longer for consumers to unwind the conduct they've discovered to assist them manipulate the cost-of-residing crisis. Own-label strains are proving resilient, for example, and they're nonetheless developing quicker than brands.”
More than 50% of the total amount was devoted to own-brand sales. Sales of premium own-label products were up 9.9% on the previous year, continuing their upward trend.
Compared to the previous Friday, Saturday and Sunday, burger sales were up 13% over the previous bank holiday weekend, while beer and wine sales were up 9% and 21% respectively.
Impact of Summer Events on Retail Growth
In addition, during the summer, retailers are forecasting greater growth, boosted by the Olympic Games in Paris in July and August, as well as the Euro 2024 men's football competition in Germany from mid-June to mid-July. McKevitt says major sporting events can have a significant impact on food sales, particularly in categories such as alcohol.
During the 2022 Football World Cup quarter-final between England and France, takeaway beer sales reached their highest daily total of the year, excluding Christmas. This year, the summer sports season could provide a much-needed boost to the sector, particularly if temperatures rise.
Nevertheless, in the 12 weeks to 12 May, online grocer Ocado recorded an impressive 12.4% growth in revenues, retaining its position as the fastest growing supermarket.
Lidl achieved a record market share of 8.1%, attributed in part to its popular bakery counters, which saw a quarter of baskets filled with freshly baked bread, cakes and pastries. Tesco and Sainsbury's, Britain's two largest supermarkets, also saw their market shares rise, to 15.1% and 27.6% respectively.