Grocery price inflation moderates for fourth straight month with biggest drop since March peak
- Kantar data shows grocery price inflation fell to 14.9% over the past month
- Grocery sales also continue to rise, rising 10.4 percent in four weeks.
Grocery price inflation eased at the fastest pace since price increases peaked in March 2023 in the past month, industry figures show.
Data from market researcher Kantar shows annual grocery inflation fell 1.6 percentage points to 14.9% in the four weeks to July 9, compared with 16.5% a month earlier.
It marks the fourth straight month of annual price declines, easing pressure on cash-strapped Britons at the tills.
The study showed annual grocery inflation was 14.9 percent in the four weeks to July 9, a 1.6 percent difference from Kantar’s June data of 16.5 percent.
Fraser McKevitt, Kantar’s director of retail and consumer research, said: “That will be good news for many households although of course the rate is still incredibly high.”
The researcher also revealed that grocery sales increased 10.4 percent during the same four-week period year-over-year on a value basis.
Although the level of grocery inflation continues to fall, the rate remains historically high, with prices for eggs, cooking sauces and frozen potatoes rising the fastest.
The current level of grocery price inflation would mean that households would have spent £683 more a year on groceries to buy the same items they bought a year ago.
However, as clients changed their spending habits to combat high rates of inflation, the average annual increase in household spending is £330.
In June, Tesco chief executive Ken Murphy revealed he was optimistic that runaway food inflation may have passed its peak.
He said: “There are encouraging early signs that inflation is starting to ease across the market and we will continue to work tirelessly to ensure customers receive the best possible value at Tesco.”
This came after Tesco reported an 8.2 per cent increase in comparable sales in the first three months of the year.
The Kantar study comes after UK food and drink manufacturers cut prices for the first time in more than three years in June, shifting lower production costs up the supply chain.
“Factory gate” prices paid by wholesalers and retailers fell from the previous month for the first time since February 2020, according to Lloyds Bank UK Sector Tracker.
Annabel Finlay, Managing Director of Food, Drink and Leisure at Lloyds Bank, added: “Last month, we saw costs for food and drink producers fall for the first time since 2016.
“This has continued through June and can give companies the confidence and financial footing they need to start lowering the prices they charge their customers.”
Official UK headline inflation data for June will be released on Wednesday. It was running at 8.7 percent in May, the highest rate among the world’s big rich economies.