The slowing of price rises seen during July was the second largest change since Kantar started collecting data on grocery price inflation in 2008.
Over the same period grocery sales were up 6.5%, in contrast to a 10.4% rise from a month earlier. Year-on-year prices are up across the board, but Kantar noted the price of certain staple goods are down in comparison with the start of 2023, such as milk and sunflower oil.
Sales of own-label products rose by nearly 10% month-on-month, while branded product sales increased by 6.4% over the same period. On average, households are spending an extra £5.13 on their weekly grocery shop compared to last year, but this is fell short of the £11.27 extra they would have spent if they had purchased the same products as 12 month ago based on current inflation rates.
Notably, a number of summer favourites have struggled given the poor weather seen across the UK, with ice cream sales down 30% year-on-year. Meanwhile, the popular BBQ cheese halloumi saw a 27% decrease in sales.
Manufacturing costs ease
Corporate finance director at Rollits, Julian Wild, told Food Manufacture that consumers will be feeling significantly poorer than this time last year, despite inflation slowing.
“The fall in food price inflation was widely predicted and it was always highly likely that grocery prices would start to fall from the very high levels we saw earlier in the year,” said Wild.
“Some of the cost pressures experienced by manufacturers and retailers (such as energy and fuel) have eased and labour availability is starting to improve, so realistically prices should continue to fall through to the end of this year (albeit not to the level anticipated by the Government). Overall inflation around 5% seems quite realistic, which is still more than double the Bank of England’s previous target.”