Grocery price inflation in Great Britain has slowed to the lowest level since 2021, while households are still trading down to cheaper products after two and a half years of rapidly rising prices, research has shown.
While pressures remain on household budgets, sales of burgers, beer and wine jumped during the bank holiday weekend at the start of May, according to the retail researchers Kantar. It found grocery price inflation had fallen for the 15th month in a row, to 2.4%, the lowest rate since October 2021 and down from 3.2% in April.
Fraser McKevitt, the firm’s head of retail and consumer insight, said: “Grocery price inflation is gradually returning to what we would consider more normal levels. It’s now sitting only 0.8 percentage points higher than the 10-year average of 1.6% between 2012 and 2021, which is just before prices began to climb.”
While the worst of the cost of living crisis is over, when food and energy bills soared in the double digits, many shoppers are still opting for supermarkets’ cheaper own-label products to save money.
McKevitt said: “After nearly two and a half years of rapidly rising prices, it could take a bit longer for shoppers to unwind the habits they have learned to help them manage the cost of living crisis. Own-label lines are proving resilient, for example, and they are still growing faster than brands.”
Own-label sales made up more than half of total spending. Sales of premium own-label ranges continued to increase too, up by 9.9% compared with a year ago.
During the most recent bank holiday weekend, burger sales climbed 13%, while beer and wine sales shot up by 9% and 21% respectively compared with the previous Friday, Saturday and Sunday.
Retailers hope for further increases over the summer, aided by the Euro 2024 men’s football tournament in Germany from mid-June to mid-July, and the Olympic Games in Paris between July and August.
McKevitt said: “Major sporting events can have a big impact on grocery sales, particularly in categories like alcohol. During England’s quarter-final match against France in the 2022 Fifa men’s World Cup, take-home beer sales hit their biggest daily takings of the year outside Christmas. Especially if it’s paired with warmer temperatures, this year’s summer of sport could deliver a welcome boost for the sector.”
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The online grocer Ocado was again the fastest-growing supermarket over the 12 weeks to 12 May when its sales rose by 12.4%. Lidl reached a record market share of 8.1%, fuelled in part by its bakery counters as freshly baked bread, cake and pastries made it into a quarter of baskets over the period.
Britain’s biggest grocer, Tesco, and Sainsbury’s also increased their market shares, to 27.6% and 15.1% respectively.