Food prices fall for the seventh month in a row with average price of butter 16p less than last year – as grocery inflation dips after peak of 17.5% in helping hand to cash-strapped families
- Supermarket prices 11% higher than a year ago for the four weeks to October 1,
- This was down from the previous month’s 12.2%, according to analysts Kantar
Grocery price inflation has fallen for the seventh month in a row, figures revealed today with the average price of a pack of butter now 16p less than a year ago.
Prices across UK grocers were 11 per cent higher than a year ago for the four weeks to October 1, down from the previous month’s 12.2 per cent, analysts Kantar said.
It is the seventh consecutive decline in the rate of price rises since the figure peaked at 17.5 per cent in March, handing a boost to families hit by the cost-of-living crisis.
The latest fall was helped by the proportion of groceries bought on offer increasing to 26.5 per cent over the last 12 weeks, the highest level since last June.
Tesco, which Kantar said had been driving the increase in promotions, saw sales rise by 9.2 per cent, with its market share up by 0.4 percentage points to 27.4 per cent.
Sales of brands on offer hit their highest rate since January, helping sales grow by 7.3 per cent and narrowing the gap with the 10.1 per cent growth of own-label lines.
READ MORE Shoppers are sick of retailer scams including shrinkflation, bogus loyalty card savings and variable prices, research shows
Discounter Lidl was the fastest growing retailer with sales up by 15.2 per cent over the quarter to take 7.6 per cent of the market.
However, consumers once again put aside cost-of-living concerns to enjoy the joint warmest September on record, sending sales of ice cream, burgers and dips soaring by 27 per cent, 19 per cent and 10 per cent respectively on the same time last year, while sales of sun care products more than doubled across the month.
The summery temperatures also resulted in sales of Christmas puddings and seasonal biscuits falling by 14 per cent and 29 per cent on a year ago.
Tom Steel, strategic insight director at Kantar, said: ‘Grocery price inflation is still very high, but shoppers will be relieved to see the rate continuing to fall.
‘For the first time since last year, the prices of some staple foods are now dropping and that’s helping to bring down the wider inflation rate.
‘Dairy was one of the categories where costs really shot up last autumn but the average price paid for a 250g pack of butter is now 16 pence less than 12 months ago.’
It comes as separate data from the British Retail Consortium (BRC)-KPMG Retail Sales Monitor revealed today that retail sales growth slowed last month as consumers limited their spending in the face of higher housing.
Tesco still has by far the highest grocery market share at 27%, followed by Sainsbury’s at 15%
Total UK retail sales limped to a 2.7 per cent increase in September despite the fall in inflation, in line with the three-month average but well below the 12-month average of 4.2 per cent.
READ MORE Revealed: The only 15 food and drink items that have fallen in price over the past year
The index said consumer caution saw sales of big ticket items such as furniture and electricals performing poorly, while the warm temperatures stretching late into the month meant sales of autumnal clothing, knitwear and coats have yet to materialise.
Food and drink sales were up 7.4 per cent in September, continuing the positive momentum seen in August, but are still below the 12-month average growth of 8.4 per cent.
However inflation is still significantly higher than recent historical standards and sales volumes remain down year on year.
Online sales growth continued to fall, with just health, beauty and jewellery recording positive figures.
A further study released by Barclaycard today showed shoppers are fed up with retailers’ price scams, such as shrinkflation, bogus loyalty card savings and variable prices.
It found most believe supermarkets, manufacturers, pubs and other firms use underhand tactics to thwart their efforts to save money and make ends meet.
Two in three shoppers say shrinkflation – when an item’s weight falls but the price doesn’t – has become so common that stores should put warning labels on products that become smaller but not cheaper.
Prices across UK grocers were 11% higher than a year ago for the four weeks to October 1 (file)
Last week, new research by Which? found Sainsbury’s is now more expensive than its upmarket rival Waitrose for customers without a loyalty card .
READ MORE Sainsbury’s is ‘more expensive’ than upmarket rival Waitrose for customers without a loyalty card, research suggests
Consumer researchers compared the average prices of a shop consisting of 39 popular groceries at eight of the UK’s biggest supermarkets – Aldi, Asda, Lidl, Morrisons, Ocado, Sainsbury’s, Tesco and Waitrose.
Experts also compared a larger trolley of 131 items at six supermarkets – with Aldi and Lidl excluded from the results as they do not always stock big-brand products.
And, earlier this month, data from the BRC and NielsenIQ’s Shop Price Index revealed that food prices had fallen on the previous month for the first time in over two years, bringing grocery inflation down to single digits.
Under the index, grocery prices in Britain were down 0.1 per cent last month compared with August – marking the first time the average figure had dropped month-on-month since 2021.
Overall food inflation decelerated to 9.9 per cent in September, a significant drop from 11.5 per cent in August and its lowest point since August last year.
The Office for National Statistics published data last month showing food and non-alcoholic drinks prices rose by 0.3 per cent between July and August 2023, compared with a rise of 1.5 per cent between the same two months a year ago.
This resulted in an easing in the annual rate to 13.6 per cent in August, down from 14.9 per cent in July and a recent high of 19.2 per cent in March 2023, which was the highest annual rate seen for more than 45 years.
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