Grocery price inflation has seen its steepest decline since inflation peaked in March, according to the latest data from Kantar.
The data shows grocery price inflation fell 1.6 percentage points to 14.9% in the four weeks to 9 July 2023, while take-home grocery sales over the same period grew by 10.4% year-on-year.
Fraser McKevitt, Head of Retail and Consumer Insight at Worldpanel Division, UK, said: “Grocery price inflation has now been falling for four months in a row. That will be good news for many households although, of course, the rate is still incredibly high. The change comes as spending on promotions has gone up for the first time in two years, now accounting for just over a quarter of the total market at 25.2%.
“One of the biggest shifts we’ve seen in this area is retailers ramping up loyalty card deals like Tesco’s Clubcard Prices and Sainsbury’s Nectar Prices. This could signal a change in focus by the grocers who had been concentrating their efforts on everyday low pricing, particularly by offering more value own-label lines.”
McKevitt says the boost to promotional spending has contributed to bringing inflation down but this isn’t all that’s driving the change. It’s clear that shoppers have dramatically changed their behaviour to combat inflation, whether by trading down to cheaper products or visiting different grocers.
In addition, the data shows consumers are visiting supermarkets less often than they did before the pandemic and buying more when they are there. Trips to stores have only gone up by 1% year-on-year – at that rate of change, it would take until 2028 for us to get back to pre-pandemic levels.
Kantar’s figures show that consumers have been getting into the Wimbledon spirit, with spending on strawberries and fresh cream shooting up by 16% and 13% compared to last year.
In addition, June saw consumers grabbing the chance to enjoy some outdoor dining with volume sales of barbecue classics like chilled burgers rising by 7% and chilled dips by 5%. Meanwhile, sales of hay fever remedies grew by 16% over the past month as people dealt with seasonal allergies.
