For the four weeks up to 29 October 2023, grocery prices were 9.7% higher when compared with the same time period a year ago.
Kantar’s UK head of retail and consumer insight, Fraser McKevitt, described the fall to below 10% inflation as a “big milestone” but warned that consumers are continuing to tackle high prices in the run up to Christmas.
Meanwhile, every retailer included in the data was found to have experienced an increase in the proportion of sales that came via deals when compared with October 2022. This has only happened on one other occasion in the past 10 years.
Consumer spending on promotions is now 27.2% of total grocery sales, up from below 25% a year ago and the highest level since last Christmas.
Tesco retains the largest grocery market share at 27.4% with Sainsbury’s next at 15.2%. Lidl was the fastest growing retailer over the past 12 weeks, with its grocery market share now 7.6% and its sales up 14.7%.
‘Consumers still feeling the pinch’
Reflecting on the trends displayed in the latest data, McKevitt said: “While the drop to 9.7% is positive news and something of a watershed, consumers will still be feeling the pinch. We’re only seeing year on year price falls in a limited number of major categories including butter, dried pasta and milk.”
Persistent high prices have led to consumers adjusting how they spend their money in grocery stores, although this will not necessarily continue to be the case as the festive season approaches.
“It’s now been over a year and a half of pinched pockets and people are continuing to respond by trading down on the items they’re putting into their baskets,” explained McKevitt.
“Own label lines have grown ahead of their branded counterparts every month since February 2022, with the latest four weeks showing a sales boost of 8% for these lines. However, the picture may well change as we go headlong into the festive period, when shoppers typically turn more to brands."