Grocery price inflation has dropped at its sharpest rate since peaking earlier this year, in a sign that Britain’s lengthy cost-of-living crisis may finally be easing.
Annual price growth dropped 1.6 percentage points to 14.9% in the four weeks to July 9, according to market research firm Kantar. Grocery inflation has fallen for four consecutive months, having risen to a record high in March.
More than a quarter of sales were made through promotions as shoppers try to save money, the survey showed. Retailers are shifting efforts from everyday low pricing, including on store-brand products, to loyalty programs such as Tesco Plc’s Clubcard or J Sainsbury Plc’s Nectar card.
Britain’s overall rate of inflation has remained stubbornly high this year despite rising borrowing costs. Economists expect it to dip to 8.2% on Wednesday, but the last four readings from the Office for National Statistics all exceeded forecasts.
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“Shoppers have dramatically changed their behavior to combat inflation, whether by trading down to cheaper products or visiting different grocers,” said Fraser McKevitt, head of retail and consumer insight at Kantar. The average household has increased grocery spending by £330 ($432) over the last year, the data showed, significantly less that the £683 rise they would have suffered without changing their shopping habits.
Discounters
Sainsbury’s sales increased by 10.7% year-on-year, the first time since January that its growth rate has beaten Asda and Tesco, which grew by 10.5% and 10.2% respectively.
The search for cheaper prices means discount grocer Aldi was again the fastest-expanding retailer, with sales up by 24%, while Lidl recorded a 22.3% annual jump in sales.
