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TOP NEWS: Food price inflation falls in June on wet spring weather

18th Jun 2024 08:36

(Alliance News) - Food price inflation fell for the sixteenth month in a row while sales ticked higher, figures on Tuesday showed.

In the four weeks to June 9, market research firm Kantar said grocery price inflation eased to 2.1%, the lowest level since October 2021. This was lower than the 2.4% reported in the four weeks to May 12, which itself was down from 3.2% in April.

Fraser McKevitt, head of retail & consumer insight at Kantar, said: "The sixth wettest spring on record hasn't just dampened our spirits leading into summer, it's made a mark on the grocery sector too as it seems Britons are being put off from popping to the shops. We're not yet reaching for those typical summertime products and are making some purchases you wouldn't expect in June."

"The cost-of-living crisis isn't over – far from it. 22% of households say they're struggling, meaning that they aren't able to cover their expenses or are just making ends meet. However, there are positive signs that many of us no longer feel the need to restrict our spending quite so much, with lower inflation helping to ease the pressure on people's pockets," he added.

In the same four week period, Kantar said grocery sales rose by 1.0%. For the 12 weeks to June 9, total grocery sales rose 2.4% to GBP33.98 billion from GBP33.18 billion a year prior. This was slightly below the 3.6% growth seen in the 12 weeks to May 12.

Kantar highlighted said are rising fastest in markets such as vitamins, minerals & supplements, chilled fruit juices & drinks and chocolate confectionery, but are falling fastest in toilet tissues, butter and milk.

McKevitt suggested sales could rise further in the coming months with the 2024 UEFA European men's football tournament and the Olympic Games on the horizon.

"The grocers are looking to entice in consumers enjoying this year's tournament, with the proportion of beer and lager sales on promotion leaping up to over 40% in the latest four weeks," McKevitt commented.

"Pubs especially could benefit from a boost – whether or not football comes home. Throughout the last tournament held in 2021, sales of food and non-alcoholic drinks in pubs soared by 60% compared with the average month that year."

Ocado Retail was again the fastest growing grocer over the 12 weeks to June 9, with sales up 10.7% to GBP608 million from GBP549 million a year prior.

The online-only grocer is a joint venture between Ocado Group PLC and Marks & Spencer Group PLC.

Lidl increased its hold of the market by 0.4 percentage points. Sales in the 12 weeks to June 9 rose 8.1% to GBP2.76 billion from GBP2.55 billion.

Sales at Britain's biggest grocer Tesco PLC rose 4.6% in the 12 weeks to June 9 to GBP9.40 billion from GBP8.99 billion, taking its market share to 27.7% - an increase of 0.6 percentage points since last year.

J Sainsbury PLC's market share nudged up to 15.2%, driven by sales of GBP5.18 billion, up 4.9% from GBP4.93 billion a year prior.

Asda and the convenience retailer Co-op captured 12.8% and 5.5% of the grocery market respectively. Meanwhile, Waitrose welcomed 188,000 new shoppers over the latest 12 weeks, a greater increase than any other grocer, taking it to a 4.5% market share.

Shares in Tesco were up 0.6% at 308.90 pence in London on Tuesday. Shares in J Sainsbury rose 0.4% to 259.80p. Shares in Ocado rose 1.0% to 350.80p each.

By Holly Beveridge, Alliance News senior reporter

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