Grocery worth inflation falls for fifth month in a row, retail information suggests

Grocery worth inflation has eased for the fifth month in a row – as the price of some staples come down.

Closely watched information from Kantar Worldpanel, which tracks grocery store gross sales and payments, discovered that whereas the expense of a meals store remains to be greater than final 12 months, the tempo of worth rises has been slowing down this summer season.

Its researchers reported a grocery worth inflation charge of 12.7% within the 4 weeks to six August – a 2.2 percentage point drop from the month before.

Kantar stated a fall in the price of some staples was an element. It stated buyers paid £1.50 for 4 pints of milk final month, down from £1.69 in March.

The common price of a litre of sunflower oil is now stated to be £2.19 – 22 pence lower than within the spring.

Kantar’s head of retail and shopper perception, Fraser McKevitt, stated: “The newest slowdown in worth rises is the second sharpest month-to-month fall since we began monitoring grocery inflation on this manner again in 2008.

“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.”

He stated the typical enhance in households’ weekly grocery store is £5.13, when put next with final 12 months.

Researchers additionally discovered that the current moist climate throughout a lot of the UK had an impression on supermarkets’ figures in July.

Sales of ice cream and Halloumi have been down round 30% – whereas purchases of soppy drinks fell by practically a fifth.

Read extra from enterprise:
B&Q apologises for ‘White Supremacy’ books in product listing
UK employers set to boost wages by 5%
‘Critical’ Bank of England payments system fails

However gross sales of soup – historically seen as a winter hotter product – have been up 16% year-on-year.

Kantar stated the gloomy climate was additionally prone to have contributed to a drop in footfall, which was down for the primary time in 18 months as folks made 320,000 fewer journeys to supermarkets in comparison with a 12 months in the past.

Overall take-home grocery gross sales rose by 6.5% within the 4 weeks to six August, down from 10.4% within the earlier interval.

But researchers stated different supermarkets might quickly profit from the collapse of Wilko, which went into administration last week.

The chain’s 400 shops stay open – for now – but its long-term future is in doubt.

“Wilko is a popular choice for many shoppers with 7.6 million households visiting its stores to buy groceries in the last year,” stated Mr McKevitt.

He added: “Wilko’s rivals will be keeping a close eye on its fortunes in the coming days and weeks as they look to draw some of its shoppers through their doors.”

Kantar’s analysis comes forward of latest official inflation figures, that are on account of be launched by the Office for National Statistics on Wednesday morning.

Last month it reported a bigger-than-expected drop in the rate to 7.9% in the year up to June.

The Bank of England then decided to raise interest rates for the 14th time in a row to 5.25% as a part of makes an attempt to convey inflation again all the way down to its goal of two%.

Inflation is predicted to fall once more this week, though consultants consider it’s unlikely the Bank will obtain its goal this 12 months.

The Bank of England’s chief economist, Huw Pill, additionally stated final week that food prices may never fall back to the level they were before the war in Ukraine began.

Separate figures from the British Retail Consortium (BRC) earlier this month additionally recommended meals worth inflation has been falling in current months, with the price of some staples coming down.

But it warned the pattern might not proceed easily this 12 months as a result of there have been “dark clouds on the horizon”.

The BRC stated this included the potential impression on costs of Russia’s decision to pull out of a deal to allow the safe export of grain from Ukraine, in addition to a ban by the Indian government on the export of some types of rice.