Further ease in grocery price inflation but shoppers still feeling pressure

Further ease in grocery price inflation but shoppers still feeling pressure

Grocery price inflation dropped to 4.5%, the lowest level in two years, however almost a quarter of households (23%) still struggle financially.

Over the four weeks to 17th March, grocery price inflation eased to 4.5%, its lowest level since February 2022, according to the latest Kantar data. However, despite this continued slowdown, many households are still feeling the squeeze.

Take-home grocery sales rose by 4.6% over the four weeks, with an early Easter boosting sales of seasonal treats in the first three months of 2024, by £88 million, compared with the same period last year.

Meanwhile, sales of branded goods pushed ahead of own label this month, while premium own-label lines saw growth of 16.1%, the quickest rate in almost three years.

As head of retail and consumer insight at Kantar, Fraser McKevitt explains, consumers are still on the hunt for value.

“Among those feeling most pressured, 78% are actively buying cheaper groceries, while 68% are using promotions to help manage budgets,” said Fraser McKevitt.

“Retailers appear to be responding in kind, with the emphasis on discounts and price match schemes continuing this period. £605 million more was spent on deals this month than in March last year.”

With Easter on the horizon, Fraser added that a quarter of people have been picking up four or more items when buying chocolate eggs.

“This rises to 29% for shoppers aged over 65, suggesting that many grandparents are planning to indulge their families this weekend,” he said.

Meanwhile, in the supermarket share, year-on-year sales at Tesco and Sainsbury’s climbed by 5.8% and 6.7% respectively, their shares of the market nudged up by 0.4 percentage points each to 27.3% and 15.2%.

Lidl grew by 8.8% to capture a 7.8% share of the market, helped by a 24% rise in sales of baked goods and a 11% jump in fruit, vegetables and salads.

“Premium own-label lines have been a big beneficiary of consumers trading down, growing by a whopping 16.1% this month – the quickest rate we’ve seen in nearly three years,” added Fraser McKevitt.

“However, sales of branded goods pushed just ahead of own label overall, increasing sales by 6.1% and 4.7% respectively in the latest four weeks.”