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Grocery price inflation slows to lowest level since October 2021 but consumers still feel the pinch

GROCERY prices have risen at their slowest pace since October 2021. Yet, consumers are still feeling the pinch of the cost-of-living crisis, recent data reveals.

According to analysts Kantar, supermarket prices are now 2.4% higher than a year ago. This marks the 15th consecutive month of slowing inflation, down from April’s 3.2%. Grocery inflation currently sits just 0.8 percentage points above the ten-year average of 1.6% before the price surge began.

Despite this slowdown, cheaper own-label supermarket products remain popular, making up over half (52%) of total spending. Premium own-label ranges have also seen a sales increase of 9.9% compared to last year.

Fraser McKevitt, head of retail and consumer insight at Kantar, explains: “Grocery price inflation is gradually returning to more normal levels. Typically, when inflation hits around 3%, we see changes in shopping habits. Shoppers tend to opt for cheaper items when prices rise above this mark, and vice versa. However, after nearly two and a half years of rapid price increases, it might take a while for consumers to adjust their spending habits.”

Data shows that during the early May bank holiday weekend, consumers indulged in barbecue essentials, with burger sales up by 13% and beer and wine sales rising by 9% and 21% respectively compared to the previous week.

Ocado remains the fastest-growing grocer, with sales up by 12.4% over the 12 weeks ending 12th May. This growth far outpaces the total online market’s 5.4% increase.

Lidl achieved a record-high market share of 8.1%, partly thanks to its bakery counters and loyalty scheme. Tesco, the UK’s largest grocer, now commands 27.6% of the market, with sales growing by 5.6%. Sainsbury’s also saw a 5.6% increase in sales, now claiming 15.1% of the market share.

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