Grocery price inflation in the UK has now been falling for four months in a row, the latest analysis shows.
In its monthly report, industry analyst Kantar said that grocery prices increased by 14.9% in the four weeks to 9 July 2023. Although still high, this is 1.6 percentage points lower than a month earlier and the rate of decrease is accelerating.
Spending on promotions, including supermarket loyalty card deals, has gone up for the first time in two years and now accounts for just over a quarter of the total market.
“One of the biggest shifts we’ve seen in this area is retailers ramping up loyalty card deals like Tesco’s Clubcard Prices and Sainsbury’s Nectar Prices,” said Fraser McKevitt, head of Retail and Consumer Insight at Kantar Worldpanel. “This could signal a change in focus by the grocers who had been concentrating their efforts on everyday low pricing, particularly by offering more value own-label lines.”
At the current level of inflation, households would have spent £683 more on their annual grocery bill to buy the same items as they did a year ago. However, consumers have adapted their shopping habits to limit this increase — for example by trading down to cheaper products or visiting different shops to find the best value. As a result, the average annual increase to household grocery spending over the past 12 months has actually been £330.
Another change to shopping habits means that we are still visiting the supermarkets less often than before the pandemic and buying more when we are there.
Kantar noted that while some people may be shopping less often to manage spending, this change is also linked to more people working from home, with fewer opportunities to pop into the shop on the way to or from work.
