Inflation Drops to Lowest Level Since July 2022
In October, U.K. grocery-price inflation witnessed its eighth consecutive monthly decline, reaching its lowest rate since July 2022, according to a report by market-research firm Kantar.
Annual grocery inflation for the four-week period ending on October 29 was 9.7%, down from September’s 11%. This marks the first time in 16 months that the increase has been in single digits.
Limited Price Reductions
Despite this positive development, consumers are still experiencing inflationary pressures, as on-year price reductions are only limited to certain categories such as butter, dried pasta, and milk, as highlighted by Fraser McKevitt, Kantar’s head of retail and consumer insight.
In an effort to ease the impact on shoppers and slow the rate of price rises, retailers have increased their focus on promotions. In fact, all of the grocers surveyed have seen an increase in the proportion of sales through deals compared to last year. This level of promotion has only been seen once before in the past decade.
High Consumer Spending on Promotions
Consumer spending on promotions reached its highest level since last Christmas, accounting for 27.2% of total spending.
Own-Label Goods and Branded Products
Amidst the search for cost-saving measures, sales of own-label goods rose by 8.0%, while branded products also saw growth with a 6.7% increase.
However, McKevitt notes that this picture may change as the festive period approaches, with shoppers typically showing a preference for brands during this time.
Lidl, the German discounter, continues to be the fastest-growing retailer, with a sales increase of 14.7% over the quarter. This brings Lidl’s market share to 7.6%.
Aldi also saw significant growth, with sales rising by 13.2% and its total market share now standing at 9.7%.