Grocery inflation falls as cost pressure eases
GROCERY inflation fell from to 5.3% to 4.5% this month, its lowest in more than two years, figures showed yesterday.
Fraser McKevitt, of market research group Kantar which released the data, said the decline was due mainly to costs pressures easing at food, drink, alcohol and household and beauty products manufacturers and producers.
At the same time, full-line supermarkets are engaged in a cut-throat price war with discounters Lidl and Aldi.
Although grocery price inflation, which peaked at 17% 12 months ago, is falling, McKevitt said that nearly a quarter of Britons are still grappling with their living costs.
Ocado was the fastest growing supermarket over the 12 weeks to March 17, with sales growth of 9.5%. Lidl was second with an 8.8% increase and Sainsbury’s third with a 6.7% gain.
Ocado said revenues at its online supermarket, Ocado Retail, grew 10.6% to £645.3million during its first quarter, thanks to its decision to cut prices on 1,700 items at the start of the year.
The cuts helped increase the number of active customers at Ocado Retail by 6.4% to one million, with average orders per week up 8.4% to 414,000 and the value of the average shopping basket rising 2.1% to £125.47.
Hannah Gibson, chief executive, said: “We have made a strong start to the year. Our strategy is resonating with customers and volume growth is building well.”
Co-op saw a 0.4% sales decline according to Kantar’s data, while Asda and Iceland saw the weakest growth, at 0.2% and 2.2% respectively.
Kantar said that market leader Tesco increased its market share by 0.4 points to 27.3%, while in second place, Sainsbury’s saw its share increase from 14.8% to 15.2%. Asda, Morrisons, Co-op and Iceland lost market share.