Grocery inflation drops to lowest rate in two years

Latest data marks the lowest rate since March 2022

Data analysts indicate a slow start to the year, with shoppers still cautious on spend. Picture: Words
Kantar has reported the lowest rate for grocery price inflation in almost two years as shopper confidence builds.                    Photo Credit: Words

MARKETPLACE insights firm Kantar has reported the lowest rate to grocery price inflation in almost two years.

The grocery price inflation dropped to 5.3% during the four weeks to 18 February which marked a decrease of 1.5 percentage points, according to Kantar.

Tom Steel, strategic insight director at Kantar, said: “Things are looking up for shoppers this February.  Consumers have been navigating a grocery inflation rate of more than 4% for two years now, so this latest easing of price rises is especially welcome.”

Consumers also weren’t deterred to go to the shops as well during the time period, with take-home grocery sales rising by 5.1% during the four weeks with plenty of shoppers finding room in the budget to treat loved ones on Valentine’s Day.

Further to this, alcohol sales saw a rebound during February, according to Kantar, with plenty of shoppers seeing off the Dry January challenge in style, representing a 18% rise in volume sales for the off-trade.

And shoppers were looking to treat themselves in the section too, with wine sales up by 28% – undoubtedly boosted in part by Valentine’s celebrations – and a rise of 16% for beers and lagers.

This remains a positive sign for shopper attitudes at the moment, with current news around the Red Sea shipping crisis evidently doing little to deter customers.

Kantar has partially put this down to supermarket prices as well as a resurgence in promotional buying after the Christmas period, though the shift towards supermarket own-label ranges remains a strong one.

Steel said: “Though there’s been lots of discussion about the impact the Red Sea shipping crisis might have on the cost of goods, supermarkets have been pulling out all the stops to keep prices down and help people manage their budgets.

“This month, Morrisons became the latest retailer to launch a price match scheme with Aldi and Lidl, after Asda made the move in January.  More generally, we saw promotions accelerate this month after a post-Christmas slowdown.

“Consumers’ spending on offers increased by 4% in February, worth £586 million more than the same month in 2023.  Sainsbury’s and Iceland’s efforts paid off in particular, and they were the only retailers to attract more shoppers through their doors.

“The battle between supermarkets’ own-label lines and brands also remains fierce. Own-label nipped ahead this month, growing sales by 5.5% versus branded products at 5.3%.”