New data reveals that food price inflation has dropped to single-digit levels for the first time since July 2022. Over the four weeks leading up to October 29, prices at grocery stores increased by 9.7% compared to the same period last year, down from the previous month’s 11%, as reported by research firm Kantar.
This marks the eighth consecutive decline in the rate of price increases since it reached its peak at 17.5% in March. It also represents the first time in 16 months that the figure has fallen below 10%. Kantar has described this decline as a significant milestone and positive news, even though consumers may still be feeling the financial strain.
Fraser McKevitt, an expert at Kantar, pointed out that year-on-year price reductions are only evident in a limited number of major categories, such as butter, dried pasta, and milk. Retailers have responded by increasing promotional efforts, with consumer spending on promotions now accounting for 27.2% of total grocery sales, the highest level since the previous Christmas season.
McKevitt predicts fierce competition for shoppers’ Christmas spending this year, emphasizing that consumer loyalty to specific stores is declining, and traditional shopping demographics are no longer as relevant.
In terms of market performance, Lidl emerged as the fastest-growing retailer this month, with a sales increase of 14.7% over the past 12 weeks, pushing its market share up by 0.4 percentage points to 7.6%.
Aldi and Waitrose were the only two grocers to attract more shoppers year on year, with Aldi gaining 207,000 more customers than the previous year. Their sales grew by 13.2% and 5.4%, respectively, resulting in a market share of 9.7% for Aldi and 4.6% for Waitrose.
Among traditional supermarkets, Sainsbury’s was the fastest-growing this month, experiencing a 10.1% increase in sales over the 12 weeks leading up to October 29, compared to the previous year.
The retailer’s market share now stands at 15.2%, up from 14.9% the previous year. Tesco, the largest grocery chain in Britain, also saw its market share increase for the fourth consecutive month, reaching 27.4%, an increase of 0.4 percentage points year on year, with sales growth at 9.5%.
Morrisons has maintained its growth for seven consecutive months, with sales in the latest period increasing by 3.2%. It now holds 8.6% of the market, while Asda’s market share stands at 13.6%. The Co-op experienced sales growth of 5.2%, the fastest rate since March 2021, and its market share currently stands at 6.0%.
