Grocery price inflation falls to single digit figures for the first time in 16 months

In the four weeks to October 29, 2023, grocery price inflation hit 9.7%  – falling below 10% for the first time since July 2022, according to the latest grocery market share data from Kantar.

During the same period, take-home grocery sales rose by 7.4% as compared with last year. 

Despite the welcome fall in inflation, Kantar head of retail and consumer insight, Fraser McKevitt, says customers will still feel the pinch going forward.

McKevitt said: “Grocery price inflation has finally dropped into single digits after 16 months of double-digit growth, marking a big milestone for the British public and retailers.

“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.”

Kantar reported that shoppers have been taking matters into their own hands to help manage their spend as they gear towards the festive season.

McKevitt explained: “It’s now been more than 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. 

“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,” he said. 

“However, the picture may well change as we go headlong into the festive period, when shoppers typically turn more to brands.

“The gap between own-label and branded goods is at its narrowest since spring last year. Branded sales increased by 6.7% in the latest month, raising the distinct possibility that they will push ahead by Christmas.”

Kantar revealed that the British consumer isn’t loyal to where they shop since discounters have benefited from increased market share at a time when value has taken priority over everything else.

McKevitt said: “When it comes to where people shop, Brits definitely aren’t loyal and some of the traditional shopping demographics and stereotypes have been thrown out of the window.  

“The typical customer walking through the doors of the discounters is now representative of the country as a whole, with 54% of Aldi’s and Lidl’s sales coming from the more affluent ABC1 social group (close to the national average of 55%).” 

He added: “Discounters are making their mark in frozen items and fresh groceries, like meat and veg, with these categories constituting a higher proportion of their sales than traditional retailers.”

Lidl was again the fastest-growing retailer this month with sales up by 14.7% over the 12 weeks and a market share of 7.6%. This was followed by Aldi which saw a sales growth of 13.25% to take a 9.7% share of the market.

Waitrose grew sales by 13.2% and market share by 5.4% to reach 9.7% and 4.6% of the market, respectively.

Sainsbury’s was the fastest-growing “traditional supermarket” this month, with sales up 10.1% during the same period, growing ahead of the market to hold 15.2% market share.

The UK’s largest grocery chain, Tesco, gained share for the fourth consecutive month to take 27.4% of the market while year-on-year sales increased 9.5%.