UK grocery price inflation eases again

(Sharecast News) - UK grocery price inflation eased again in the four weeks to 9 July, at the steepest rate since the March peak. According to figures released on Tuesday by Kantar, grocery price inflation declined to 14.9% from 16.5%. This marked the fourth consecutive drop and is down from a peak of 17.5% in March.

It came as supermarkets increased their focus on promotions, with over a quarter of groceries purchased on deal during the period.

Fraser McKevitt, head of retail and consumer insight at Kantar, said: "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. 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.

"The boost to promotional spending has contributed to bringing inflation down but this isn't all that's driving the change. Prices were rising quickly last summer so this latest slowdown is partially down to current figures being compared with those higher rates one year ago."

The data showed that Sainsbury's sales growth edged ahead, marking the first time since January that it has overtaken Asda and Tesco. It grew sales by 10.7%, with sales at Asda and Tesco up 10.5% and 10.2%, respectively.

Meanwhile, Aldi was again the fastest-growing grocer, with sales 24% higher, while Lidl sales rose 22.3%.