U.K. Grocery-Price Inflation Hits Lowest Rate Since July 2022

Introduction

According to a report by market-research firm Kantar, grocery-price inflation in the U.K. continued to decline in November, marking the ninth consecutive month of decrease. The report reveals that promotions and own-label products have played a significant role in keeping prices low.

Decrease in Annual Grocery Inflation

For the four-week period ending November 26, annual grocery inflation stood at 9.1%, down from 9.7% in October. This marks the lowest rate of inflation since July 2022. It is important to note that in March 2023, grocery-price inflation reached a record high of 17.5%.

Factors Contributing to the Decrease

The decline in grocery-price inflation can be attributed to retailers' focus on own-label products and promotions. Kantar's head of retail, Fraser McKevitt, stated that spending on offers reached its highest level in over two years, accounting for 28.4% of total grocery sales.

Fastest-Growing Grocers

Lidl continues to be the fastest-growing grocer, experiencing a sales increase of 14.2% over the quarter ending November 26. This growth has led Lidl to achieve a record market share of 7.8%. Aldi also performed well, with sales rising by 11.1% and its market share reaching 9.6%.

Strong Growth for Sainsbury's

Sainsbury's saw the strongest growth in market share since March 2013, with a 0.4 percentage point increase to reach 15.6%. This growth is driven by a significant 10.2% increase in sales.

Christmas Key Period Outlook

Kantar predicts that grocery sales during the Christmas period will surpass £13 billion ($16.42 billion) for the first time. Fraser McKevitt stated, "The scene is set for record-breaking spending at supermarkets this Christmas. Consumers tend to buy 10% more items during the festive period compared to a typical month. Additionally, the ongoing price inflation we've experienced this year will also contribute to the increase."

Affordable Christmas Meal

Shoppers can expect some relief in the cost of a traditional Christmas meal, as the price remains below the inflation rate. A dinner for four people is estimated to cost £31.71 this year.