Consumers are still “feeling the pressure” despite UK supermarket food prices falling to single digits for the first time since July 2022, as the battle between supermarkets to attract customers with special promotional offers intensifies.
The rate of supermarket price increases slowed to 9.7 percent in October, down from 11 percent the previous month and well below the March peak of 17.5 percent, according to research firm Kantar.
Fraser McKevitt, head of retail and consumer insight at Kantar, said: “Food price inflation has finally fallen to single figures after 16 months of double-digit growth, marking a major milestone for the British public and retailers.”
He said consumers were still “feeling the pressure” as prices fell year-on-year in only a few key categories, including butter, dry pasta and milk.
“Retailers continue to look for ways to ease the burden on shoppers and slow the rate of price increases,” he said. “This included raising the bar on promotions—all grocers increased the share of sales generated through deals compared to last year, something that has happened only once in nearly a decade.”
“It’s been over a year and a half since we’ve been in the bag and people continue to respond by exchanging items they’ve added to their cart. The gap between own-label items and branded items is at its lowest since last spring.”
Kantar notes that since February 2022, its private label lines have become larger than their branded counterparts every month. “The picture may change as the holidays approach, when consumers tend to pay more attention to brands. Sales of branded products rose 6.7% last month, meaning they are likely to continue to do so in the run-up to Christmas.”
Kantar said the decline from 11 percent over the past four weeks continued to be driven by discounting from rival supermarkets as they sought to secure customer loyalty ahead of the crucial Christmas shopping period.
Low-cost discounter Lidl led the pack, with sales up 14.7 percent in the three months to mid-October in the twelve weeks to 19 October, according to Kantar. Aldi and Waitrose increased sales by 13.2 percent and 5.4 percent respectively.
Sainsbury’s was the fastest growing company, with sales up 10.1 per cent and now has a market share of 15.2 per cent, up from 14.9 per cent last year.
Take-home grocery sales rose 7.4 percent over the same period compared with 2022, according to the latest data from Kantar.
Victoria, an Interactive Investor Fellow, said: “Prices for some items have fallen year-on-year, including butter, dry pasta and milk, but most prices are still rising.” Britain’s ranking, highlighting the pressure on individuals and families due to rising food prices.
“Supermarkets in the UK are trying to maintain their market share this year by cutting prices on key food items to attract customers. They have also focused on promotions and loyalty programs, again to try to increase footfall and dissuade consumers from shopping and switching to cheaper alternative supermarkets such as Aldi and Lidl, which are known to be price competitive.”
Sue Davis from Consumer Champions Which?said: “Overall the slowdown in inflation is a good thing, but with supermarket prices still much higher than a year ago, millions of people are still struggling to afford food – a reality that is likely to be particularly difficult for them.” It will be gloomy.” We help the neediest families on their way to Christmas.
“Supermarkets can help ease the enormous pressure shoppers – especially families and people on low incomes – face by offering affordable essentials in their upscale convenience stores. Which? Research shows that these stores rarely, if ever, sell the cheapest items.”
Source: I News
I am Moises Cosgrove and I work for a news website as an author. I specialize in the market section, writing stories about the latest developments in the world of finance and economics. My articles are read by people from all walks of life, from investors to analysts, to everyday citizens looking for insight into how news will affect their finances.