Published : 4 months ago, on 18/06/2024

UK grocery inflation edges lower again ahead of election, Kantar says

By James Davey

LONDON (Reuters) – UK grocery inflation fell for a sixteenth month in a row in June, industry data showed on Tuesday, providing a little cheer for Prime Minister Rishi Sunak ahead of next month’s election.

Market researcher Kantar said annual grocery price inflation was 2.1% in the four weeks to June 9, down from 2.4% in the previous four-week period.

In campaigning ahead of the July 4 election, Sunak has sought to take credit for more than halving overall inflation. However, there has been little sign of an opinion poll boost for his struggling Conservative Party, which badly lags the opposition Labour Party.

Kantar said prices were falling in nearly one-third of the grocery categories it tracks, including toilet tissues, butter and milk. However, they were still rising in markets such as chilled fruit juices and chocolate confectionery.

Market leader Tesco said on Friday it anticipated “very low single-digit” food inflation for the rest of 2024.

Official UK data published on May 22 showed overall consumer price inflation fell to 2.3% in the 12 months to April. Official inflation data for May will be published on Wednesday, ahead of the Bank of England’s next policy announcement on Thursday.

Kantar’s data, the most up-to-date snapshot of UK consumer behaviour, showed take-home grocery sales rose 1.0% in value terms over the four-week period on a year-on-year basis – the slowest increase since June 2022, which it said reflected poor weather and falling inflation.

“We’re not yet reaching for those typical summertime products and are making some purchases you wouldn’t expect in June,” said Fraser McKevitt, head of retail and consumer insight at Kantar.

He noted consumers bought nearly 25% fewer suncare items in the month compared with last year and 11% fewer prepared salads. In contrast, fresh soup sales jumped 24%.

McKevitt said supermarkets were hoping for a boost from the Euro 2024 soccer championship, with the proportion of beer and lager sales on promotion increasing to more than 40% in the latest four weeks.

Over the 12 weeks to June 9, online supermarket Ocado was again the fastest growing grocer. It along with Tesco, No. 2 Sainsbury’s, and discounter Lidl won market share.

Asda was again the laggard, losing 90 basis points of share on a year-on-year basis.

UK supermarkets’ market share and sales growth (%)

Market share Market share % change in

12 wks to 12 wks to sales

June 9 2024 June 11 2023 (yr-on-yr)

Tesco 27.7 27.1 4.6

Sainsbury’s 15.2 14.9 4.9

Asda 12.8 13.7 -4.0

Aldi 10.0 10.2 0.8

Morrisons 8.7 8.8 1.1

Lidl 8.1 7.7 8.1

Co-operative 5.5 5.8 -2.3

Waitrose 4.5 4.5 3.5

Iceland 2.4 2.3 4.4

Ocado 1.8 1.7 10.7

Source: Kantar

 

(Reporting by James Davey; Editing by Paul Simao)