British grocery price inflation slows to 5.3%, Kantar says

A shopper looks at fruit and vegetables inside an ALDI supermarket near Altrincham, Britain, Feb 20, 2023. REUTERS/Phil Noble/File photo

LONDON  – British grocery prices rose this month at their lowest rate since March 2022, as supermarket promotions picked up after a post-Christmas slowdown, industry data showed on Tuesday.

Market researcher Kantar said annual grocery price inflation was 5.3 percent in the four weeks to Feb. 18, down 1.5 percentage points from the previous four-week period.

“Consumers have been navigating a grocery inflation rate of more than 4 percent for two years now, so this latest easing of price rises is especially welcome,” Tom Steel, strategic insight director at Kantar, said.

It will also be welcomed by the Bank of England, which is monitoring food prices closely.

Steel said UK consumers’ spending on offers increased by 4 percent in February, worth 586 million pounds ($743 million) more than the same month in 2023.

READ:Tobacco duty causes surprise boost to UK inflation in December

He also noted that this month, Morrisons became the latest grocer to launch a price match scheme with discounters Aldi and Lidl, after Asda made the move in January.

Fastest price hike

Kantar said prices are rising fastest in markets such as sugar confectionery, chocolate confectionery and frozen potato products, and are falling fastest in butter, milk and toilet tissues.

Separate data from the British Retail Consortium on Tuesday showed overall prices in UK shops also rose at the slowest pace in nearly two years this month, adding to signs of easing inflationary pressures.

Kantar said take-home grocery sales rose in value by 5.1 percent year-on-year over the four week period.

It said Lidl was the fastest growing grocer in Britain for the sixth month in row, with sales up 10.9 percent over the 12 weeks to Feb. 18.

READ: UK economy fell into recession in second half of 2023

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No. 2 player Sainsbury’s was the second fastest growing, with sales increasing 7.6 percent, while sales at market leader Tesco rose 6.2 percent.

Asda and Morrisons were again the laggards, with growth of 1.9 percent and 3.1 percent respectively.