Cost-of-living easing up? Food price inflation drops to its lowest monthly rate this year yet… but is STILL in double digits and is at its sixth highest figure since 2008
- Grocery inflation drops to 16.5% for four weeks to June 11, according to Kantar
- This is down from last month’s 17.2% and is now at lowest level since last year
Grocery price inflation has fallen to its lowest rate this year – but remains at 16.5 per cent which is its sixth highest monthly level since 2008, figures revealed today.
The rate of growth dropped for the four weeks to June 11, down from last month’s 17.2 per cent and March’s record 17.5 per cent, according to analysts Kantar.
Meanwhile sales of ice cream and mineral water up by 25 per cent and 8 per cent respectively last month – despite prices up 20 per cent and 17 per cent on last year.
Experts said prices were rising fastest for products such as eggs, cooking sauces and frozen potatoes. Barbecue food has also seen significant price increases, with fresh sausage prices up 16 per cent and fresh burgers 13 per cent more expensive.
Kantar also found the proportion of products sold for £1, the single most popular price for a grocery item, had almost halved in a year from 9 per cent to 5 per cent.
Grocery price inflation has fallen to its lowest monthly rate this year, figures from Kantar show
The data will provide some comfort for consumers worn down by the cost-of-living crisis now in its second year, but overall inflation remains high at 8.7 per cent.
Key data from Kantar supermarket update
- Grocery price inflation is at 16.5% for the four weeks to June 11, 2023
- Lowest level this year but still sixth highest monthly figure since 2008
- Figure is down from last month’s 17.2% and March’s record 17.5%
- Nearly 70% of households are either ‘extremely’ or ‘very worried’ about rising food and drink prices
- 4% fewer meals made using an oven
- Microwave meals increase by 8%
- Sales of ice cream are up by 25% and mineral water rises by 8.
- But these items rose in price by 20% and 17% respectively
- Fresh sausage prices up 16% and fresh burgers 13% more expensive
Fraser McKevitt, head of retail and consumer insight at Kantar, said: ‘This is the lowest rate of grocery price inflation we’ve seen in 2023, which will be a relief to shoppers and retailers.
‘But prices rising at 16.5 per cent isn’t something to celebrate and it’s still the sixth highest monthly figure in the past 15 years.
‘Price rises are now being compared to the increasing rate of grocery inflation seen last summer, which means that it should continue to fall in the coming months, a welcome result for everyone.’
The figures come as a survey for Kantar found that of consumers’ top five financial worries, rising grocery prices is the only one that they are more concerned about now than at the start of this year.
Almost 70 per cent of households are either ‘extremely’ or ‘very worried’ about food and drink inflation, compared to just over two thirds when asked the same question in January.
It narrowly remains the second most significant concern behind rising energy bills.
Consumers have been attempting to swerve the full force of price increases by switching to cheaper own label lines, with sales up 41 per cent compared to last year, and changing how they eat and cook, Kantar said.
Mr McKevitt added: ‘People are thinking more and more about what they eat and how they cook as the cost-of-living crisis takes its toll on traditional behaviours.
‘The most prominent change we’ve seen is that people are preparing simpler dishes with fewer ingredients. Our data shows that the public are turning away from their oven and increasingly using microwaves, which reflects the shift to simpler cooking.’
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There were 4 per cent fewer meals made using an oven according to Kantar’s most recent 12-week data compared to the same period last year, while microwaved meals rose by 8 per cent, and Mr McKevitt noted a rise in food prepared with toasters and grills.
Meanwhile, the proportion of products sold for £1 nearly halved in a year.
Mr McKevitt said: ‘Traditionally, ’round-pound’ prices have been attractive to shoppers, who find them easier to relate to and practical as well with no leftover change.
‘But, with retailers eager to offer value and cash buying less popular, £1.25 has emerged as an increasingly important price point. It now vies with £2 as the second most popular price for a grocery item.’
Aldi was the fastest growing retailer for the quarter, seeing sales rise by 24.6 per cent to a record market share of 10.2 per cent, 1.2 points higher than the same period last year.
Lidl’s sales growth was only slightly behind its fellow discounter, increasing sales by 23.2 per cent to take 7.7 per cent of the market.
Morrisons’ sales also rose over the period and its market share is at 8.8 per cent.
Overall inflation is currently running at 8.7 per cent, with the latest figure due out tomorrow
Mr McKevitt said: ‘This was the fourth time in a row that we’ve seen Morrisons grow. It’s a modest rise compared to rivals but there are positive signs for the retailer.
READ MORE Tesco luring customers away from rivals Waitrose and Marks & Spencer as shoppers look for cheaper alternatives
‘Its Morrisons Savers range is Britain’s fastest growing value line, nearly doubling sales compared to last year, as consumers turn to own-label.’
Sainsbury’s and Asda’s sales both grew at 10.0 per cent over the past 12 weeks, ahead of the wider grocery market. They now account for 14.9 per cent and 13.7 per cent of total sales respectively.
Britain’s biggest supermarket, Tesco, saw its sales increase by 8.9 per cent, as it achieved a 27.1 per cent market share.
Tesco said last Friday that food inflation was starting to ease and it was hopeful it would moderate through the year.
Co-op’s sales rose by 3.8 per cent giving it a 5.8 per cent market share.
Following a 3.3 per cent rise in sales, Waitrose now holds 4.5 per cent of the market -leading Iceland and Ocado on 2.3 per cent and 1.7 per cent respectively.
Prime Minister Rishi Sunak’s key pledge to halve inflation in 2023 has been undermined by persistently high food inflation.
Any signs that it is abating or could even reverse in the coming months are being closely watched by the Bank of England, politicians and consumers.
The Kantar grocery price inflation figure is based on over 75,000 identical products compared year-on-year in the proportions purchased by British shoppers.
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