Market Analysis

Sainsbury's, the second-largest supermarket group in Britain, anticipates that food inflation will remain at a modest level in 2024, according to the company's CEO, Simon Roberts. 

Despite reaching a 45-year high of 19.2% in March 2023 due to various factors such as energy costs and disruptions in Ukrainian exports, inflation dropped to 4% by March of the following year, as per official figures. Recent industry data suggests that UK grocery inflation has further decreased to 3.2% this month.

Roberts expressed confidence that food inflation would continue to stabilize, expecting it to remain in the low single digits for the upcoming year. He downplayed concerns about potential impacts from poor UK harvests, particularly of crops like potatoes and onions affected by earlier flooding, stating that Sainsbury's is well-equipped to maintain availability for customers without causing significant disruptions. 

While some inflationary pressures persist, such as increased wages in the supply chain, Roberts noted that overall commodity costs are decreasing.

Paraphrasing text from "Investing UK" all rights reserved by the original author.