UK grocery price inflation eased for a third consecutive month in June, with new data suggesting it might have peaked, according to research company Kantar.
The annual pace of supermarket price increases eased to 16.5 per cent for the four weeks to June 11, down from 17.2 per cent the previous month. The figure was below the recent high of 17.5 per cent registered in March and the lowest this year, the new sector data showed.
Fraser McKevitt, head of retail and consumer insight at Kantar, said: “Price rises are now being compared to the increasing rate of grocery inflation seen last summer, which means that it should continue to fall in the coming months, a welcome result for everyone.”
Wholesale energy and food prices soared in the summer last year following Russia’s invasion of Ukraine.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said the data provided “fresh signs” that inflation would retreat further as “growth in wholesale commodity prices paid by companies slows sharply”. But, she added, food costs would stay “stubbornly high”.
The Office for National Statistics reported last month that inflation of food and non-alcoholic beverages eased marginally to 19.1 per cent in April from a 45-year high of 19.2 per cent registered in the previous month.
Economists polled by Reuters expect inflation to ease to 8.4 per cent in May, from 8.7 per cent in April, when data is released on Wednesday.
However, grocery inflation has prompted shoppers to turn to cheaper supermarkets and own-labels. Kantar reported that prices were rising fastest for foods such as eggs, ambient cooking sauces and frozen potato products.
“Savvy shoppers have been continuing to swerve the full force of price increases, with many switching to the cheapest own-label lines,” said McKevitt. Spending on those ranges have rocketed 41 per cent.
Cheaper supermarkets such as Aldi and Lidl reported annual growth rates in spending of more than 20 per cent, more than double that of the grocery sector, pushing Aldi’s market share to a record high of 10.2 per cent. Sales at the more expensive Morrisons, Waitrose and Ocado largely stagnated.
Streeter expected a meaningful reduction in prices across the aisles to be “a long way off”. She added that “shopping safaris, where customers cherry-pick the best prices from multiple stores, looks set to stay the trend in the grocery market”.