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Grocery inflation pressure eases

Michael BarkerBy Michael BarkerAugust 15, 20233 Mins Read
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Grocery price inflation is continuing to fall as pressure eases on consumers’ wallets.

Analysis by Kantar shows that grocery price inflation fell by 2.2 percentage points to 12.7% in the four weeks to 6 August 2023. Overall take-home grocery sales rose by 6.5% over the same period, down from 10.4% last month.

“The latest slowdown in price rises is the second-sharpest monthly fall since we started monitoring grocery inflation in this way back in 2008,” said Fraser McKevitt, head of retail and consumer insight at Kantar.

”Prices are still up year on year across every supermarket shelf, but consumers will have been relieved to see the cost of some staple goods starting to edge down compared with earlier in 2023.”

Sales of own-label goods rose 9.7% in the latest four-week period, while branded products rose by 6.4%, with McKevitt noting that while own-label sales continue to outpace branded, the gap between the two is closing.

Disappointing summer

Hopes of some sunshine were dashed this July as unseasonable weather put the dampeners on sales of usual summer favourites. “It was a better month for Barbie than barbecues this July as the rain put a spanner in the works for many consumers’ outdoor plans – a stark comparison to last year when we experienced the hottest day on record,” said McKevitt.

“Instead of our usual summer fare, it seems we’ve been turning to more traditional winter warmers. The amount of soup bought has gone up by 16% year on year, while roasting joints have grown by 5%. Cooler temperatures and a wetter than average month may have also put people off from venturing to the shops. Footfall was down for the first time in 18 months with people making 320,000 fewer trips to physical supermarkets than a year ago.”

Market share

Both Tesco and Sainsbury’s outperformed the market this month, fuelled by sales growth of 9.5 and 9.3% respectively over the 12 weeks to 6 August. Tesco boosted its market share to 27%, from 26.9% a year ago, and Sainsbury’s held firm year on year at 14.8%.

Asda pushed its sales up by 7.7% this month and now accounts for 13.7% of the market, while Morrisons has an 8.7% share as sales grew 2.3% compared with last year.

Aldi was the fastest-growing retailer for the fourth month in a row, with sales increasing by 21.2% versus 2022. The discounter now has a market share of 10.2%, a rise of 1.1 percentage points year on year. Lidl’s sales rose by 19.8% and the retailer now holds 7.7% of the market.

Sales at Waitrose and Co-op rose by 4.4 and 3.4% respectively, giving the retailers market shares of 4.4 and 6.1%.

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Michael Barker

Michael Barker is a farming industry journalist and regular contributor to Poultry Business.

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