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Grocery price inflation eases amid sales boost

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Grocery price rises are no longer spiralling upwards one year on from the Brexit vote, industry data suggests.

Like-for-like inflation has stabilised at 3.2%, according to Kantar Worldpanel – the same rate of increase as last month’s data.
Figures for the 12 weeks to July 16 showed supermarket sales were up 3.9% compared with the same period last year, driven by fine weather.
June’s hot spell saw ice cream sales up 34% in that month alone, while sales of sun-care products rose by 40% year-on-year as Britons enjoyed the unexpected sunshine.
Shoppers spent an additional £158m on alcohol over the 12-week period, and fruit and vegetable sales were also up 7%, bolstering the UK’s biggest supermarkets.
Price rises in supermarkets have been accelerating this year after more than two years of deflation.
However, food and drink retailers seem to have been less adversely affected than other sectors, with consumers apparently prioritising essential purchases and making the most of the warm spell.

Image: The hot weather has boosted demand for ice cream
The big four supermarkets – Tesco, Sainsbury’s, Asda and Morrisons – all posted growth in the latest period, led by a 2.3% rise for Tesco.
Discounters Aldi and Lidl continued their rapid expansion.

Lidl was once gain the UK’s fastest growing supermarket in the period. Sales grew by 19.4%, its strongest growth since October 2014, taking its market share to a record high of 5.1%.
Aldi’s sales grew by 17.9%, increasing its share of the market by 0.8% to 7%.
Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “Robust market growth this year has been boosted by higher grocery inflation, but consumers will be pleased to hear that price rises are no longer accelerating.
“One year on from the EU referendum – which had a marked impact on the price of imported groceries – hard-pressed shoppers could soon start to feel upward pricing pressures ease.”
Separate figures from analysts Nielsen also highlighted the impact of the hot weather – and also sports events such as the British and Irish Lions rugby tour of New Zealand and Wimbledon – on people’s purse strings.
They showed shoppers spent 5.1% more on groceries during the four weeks to July 15 than the same time last year – the highest year-on-year rise for at least four years.
Households also made 4% more grocery trips to supermarkets compared with the same period last year, when sales dipped because of the cool and wet weather.

Source: SKY