Grocery price inflation drops to new two-year low
Grocery price inflation has dropped to a new two-year low but almost a quarter of British households say they are still struggling financially, according to latest figures.
Supermarket prices were 4.5 per cent higher than a year ago in March, the lowest inflation rate since February 2022 and a significant drop from last month’s 5.3 per cent, according to analysts Kantar.
Despite the continued slowdown, 23 per cent of British households identify themselves as struggling financially – the same proportion as in November last year, according to a survey by Kantar Worldpanel of more than 10,700 people at the end of January.
Among those feeling the most pressured, 78 per cent are actively buying cheaper groceries while 68 per cent are using promotions to help manage budgets, with £605 million more spent on deals this month than in March last year.
Sales of branded goods pushed ahead of own label products in March. However, premium ownlabel lines grew by a “whopping” 16.1 per cent this month – the quickest rate seen by Kantar in almost three years.
Fraser McKevitt, head of retail and consumer insight at Kantar, said: “Grocery inflation has come down significantly since hitting an eyewatering peak of 17 per cent in March 2023.
“However, despite this continued slowdown, many British households are still feeling the squeeze.”
Financial woes have not stopped consumers spending £88m more on Easter treats in the first three months of this year than last year, with volume sales of hot cross buns up by 15 per cent, although the event falls 10 days earlier this year than last year.
Take-home grocery sales in general overall rose by 4.6 per cent over the four weeks to March 17.
Speaking ahead of Easter, Mr McKevitt said: “With Easter on the horizon, consumers have been stocking up on classic seasonal treats, with a quarter of people picking up four or more items when buying chocolate eggs.
“This rises to 29 per cent for shoppers aged over 65, suggesting that many grandparents are planning to indulge their families this weekend.”
Ocado was the fastest growing retailer in March, improving sales by 9.5 per cent in the last 12 weeks, well ahead of the total online market which rose by 6.6 per cent.
Year-on-year sales at Tesco and Sainsbury’s climbed by 5.8 per cent and 6.7 per cent respectively, taking them to market shares of 27.3 per cent and 15.2 per cent respectively.
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