UK grocery inflation edges higher, says Kantar

LONDON (Reuters) -British consumers faced more pressure on their budgets last month after grocery inflation edged higher, industry data showed on Tuesday.

Market researcher Kantar said annual grocery price inflation was 3.5% in the four weeks to March 23, versus 3.3% in last month's report. UK grocery sales rose 1.8% over the same period year-on-year, the slowest rate of growth since June last year.

Kantar said prices were rising fastest in chocolate confectionery, butter and spreads and chilled smoothies and juices, and were falling fastest in dog and cat food and household paper products.

UK retailers have warned that tax rises imposed in the Labour government's first budget together with another rise in the national minimum wage and a new packaging levy will be inflationary.

Industry researcher the Institute of Grocery Distribution has forecast that food inflation could hit nearly 5% this year.

Discounter Lidl was the best performing bricks and mortar supermarket over the 12 weeks to March 23, with sales up 9.1% year-on-year.

It was followed by fellow discounter Aldi, with growth of 5.6%, and market leader Tesco, with growth of 5.4%.

Asda remained the industry laggard with a sales fall of 5.6% and a 1.1 percentage points loss of market share over the year.

(Reporting by James Davey, Editing by Paul Sandle)