According to a recent report from market-research firm Kantar, grocery-price inflation in the U.K. has fallen for the seventh consecutive month, reaching its lowest rate since July 2022. This decline can be attributed to lower prices on staple foods and an increase in value offers.
For the four-week period ending on October 1st, annual grocery inflation was 11%, down from 12.2% in August and significantly lower than the record high of 17.5% seen in March.
Despite the high level of inflation, some staple food prices have started to decrease for the first time since last year, helping to bring down the overall inflation rate. For example, the average price of a 250 gram pack of butter has decreased by 16 pence compared to 12 months ago.
The report also highlights a significant increase in spending on promotions during the quarter, reaching the highest level since June 2022. This increase in promotional activity has contributed to the decrease in inflation.
Consumers are actively seeking ways to save money, leading to a 10.1% increase in sales of own-label goods. Branded products have also experienced growth, narrowing the gap with a 7.3% increase in sales, largely driven by higher promotion sales.
In terms of retailers, German discounter Lidl has been identified as the fastest growing retailer, with sales up by 15.2%. This growth has resulted in Lidl’s market share increasing to 7.6%. Aldi has also experienced a significant increase in sales, rising by 14.9% and bringing its total market share to 9.9%.
Overall, the report suggests that while grocery price inflation remains relatively high, there are positive signs of improvement as staple food prices start to decline and promotional activity increases.