Price inflation is finally returning to more normal levels, according to Kantar
Grocery price inflation has fallen again - for the 15th month in a row - to 2.4 per cent, representing its lowest level since October 2021.
New figures from Kantar show that take-home grocery sales rose by 2.9 per cent over the four weeks to 12 May, against the backdrop of price inflation gradually returning to more normal levels.
It’s now sitting only 0.8 percentage points higher than the 10-year average of 1.6 per cent between 2012 and 2021, which is just before prices began to climb.
“Typically, an inflation rate of around 3 per cent is when we start to see marked changes in consumers’ behaviour, with shoppers trading down to cheaper items when the rate goes above this line and vice versa when the rate drops,” explained Fraser McKevitt, head of retail and consumer insight at Kantar.
“However, after nearly two and a half years of rapidly rising prices, it could take a bit longer for shoppers to unwind the habits they have learnt to help them manage the cost-of-living crisis.
“Own-label lines are proving resilient, for example, and they are still growing faster than brands, making up over half (52 per cent) of total spending. Sales of premium own-label ranges continue to increase too, up by 9.9 per cent compared with a year ago.”
With the 2024 UEFA European men’s football tournament and the Olympic Games on the horizon, Kantar predicts the summer months could see sales increases for the retailers. That’s particularly true if it’s paired with warm and sunny weather.
Ocado growing fastest
Ocado was again the fastest-growing grocer over the 12 weeks to 12 May, with sales up by 12.4 per cent - well ahead of the total online market, which saw sales rise by 5.4 per cent.
The online-only retailer accounts for 1.8 per cent of the grocery market, though this figure rises to 3 per cent in London. Outside of the capital, Ocado saw its strongest growth in the south and east of England, where one in 20 households shopped at the retailer in the latest 12 weeks.
Lidl reached a new record-high market share of 8.1 per cent, while market leader Tesco now takes 27.6 per cent of the market - an increase of 0.5 percentage points since last year, marking its largest annual share gain since January 2022.
Its 5.6 per cent growth in sales was matched by Sainsbury’s, whose market share nudged up 0.3 percentage points to 15.1 per cent.
