Market Analysis

UK Grocery Price Inflation Declines to 2.4%, Reports Kantar

Amos Simanungkalit · 21 May 20242.5K Views

In May, UK grocery inflation continued its decline for the 15th consecutive month, reaching its lowest point since October 2021 according to industry data released on Tuesday.

Kantar, a market researcher, reported that annual grocery price inflation was 2.4% for the four weeks ending May 12, down from 3.2% in the previous period. However, it highlighted that prices were still rising notably for items such as chilled fruit juices, sugar confectionery, and chocolate confectionery.

Official UK government figures from April 17 showed consumer price inflation had fallen to 3.2% in March, largely driven by a slowdown in food inflation to 4%. Data for April was expected to be released the following day.

Prime Minister Rishi Sunak has attempted to claim credit for halving inflation, though this has not translated into a noticeable increase in support for his Conservative Party, which trails the opposition Labour Party ahead of an anticipated election later this year.

Kantar also reported a 2.9% year-on-year increase in take-home grocery sales over the four-week period ending May 12. Over the broader 12-week period, online retailer Ocado saw the strongest growth at 12.4%, while Tesco and Sainsbury's, the leading supermarket chains, each achieved sales growth of 5.6% and gained market share.

Discount retailers Lidl and Aldi saw sales growth of 9.4% and 2.2% respectively. Asda, however, experienced a decline with sales down 2.0% and a decrease of 80 basis points in market share compared to the previous year.

Looking ahead, Kantar anticipates potential sales boosts for supermarkets during the summer months, especially with major sporting events like the Euro 2024 soccer tournament and the Olympic Games expected to drive increased spending, particularly in categories such as alcohol.

Fraser McKevitt, head of retail and consumer insight at Kantar, commented, "This year's summer of sport, especially if accompanied by warmer weather, could provide a much-needed lift for the sector."