Grocery price inflation fell for the seventh consecutive month in the UK while still stuck in double-digits as shoppers struggle with higher living costs.
(Bloomberg) — Grocery price inflation fell for the seventh consecutive month in the UK while still stuck in double-digits as shoppers struggle with higher living costs.
Annual price growth dropped to 11% in the four weeks to Oct. 1 versus 12.2% a month earlier, according to market research firm Kantar. It’s the lowest level in more than a year, though the figure will still have an impact on consumer spending.
“Grocery price inflation is still very high, but shoppers will be relieved to see the rate continuing to fall,” said Tom Steel, strategic insight director at Kantar. “For the first time since last year, the prices of some staple foods are now dropping and that’s helping to bring down the wider inflation rate.”
Supermarkets say they’re cutting prices wherever possible, with dairy and pasta falling the most. The rate of inflation on Britain’s supermarket shelves has steadily fallen since March, when it was above 17%.
Shoppers are still frequenting discount grocers to save money, with Lidl’s sales growing more than 15% over the past year, the fastest pace among supermarkets. Aldi’s sales rose by 14.9%. By contrast, sales at Morrisons grew just over 2% and Asda’s growth was under 3%.
Tesco Plc lifted its profit forecast last week as Britain’s biggest grocer said it was attracting shoppers by keeping a tight grip on prices and its own costs. Tesco’s prices have never been closer to those of the discounters, Chief Executive Officer Ken Murphy said at the time. A spokesperson for Aldi refuted the idea saying its price gap with rivals is “as big as ever.”
Read more: Tesco Lifts Profit Goal as Grocer’s Low Prices Lure Shoppers
Britain’s antitrust regulator cleared the country’s biggest supermarkets of profiteering from high food costs in July, but said some retailers were not doing enough to allow customers to compare product prices.
Shoppers have been enjoying the warmer autumn weather in the UK, with volume sales of ice cream, burgers and dips such as houmous jumping 27%, 19% and 10% respectively, according to Kantar.
–With assistance from Sabah Meddings.
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