Grocery price inflation in the UK dipped lower slightly for another month, though shoppers are still concerned about the impact of food prices on their household budgets.
(Bloomberg) — Grocery price inflation in the UK dipped lower slightly for another month, though shoppers are still concerned about the impact of food prices on their household budgets.
The rate fell to 16.5% in the four weeks to June 11, down from 17.2% the previous month, according to Kantar. It’s the lowest level this year, but still “isn’t something to celebrate,” the market research group said.
British supermarkets are under pressure to curb prices as grocery inflation proves stickier than in other countries. They’ve pushed back against accusations that they’re profiting from higher prices, and against the government’s recent plans to introduce voluntary price caps.
Nearly 70% of households are either “extremely” or “very” worried about food and drink inflation, up from just over two thirds in January.
“The ongoing squeeze is clearly weighing on the nation’s mind,” said Fraser McKevitt, head of retail and consumer insight at Kantar. “Of the top five financial worries that consumers have, rising grocery prices is the only one that they are more concerned about now than at the start of this year.”
Shoppers are visiting discount supermarkets, buying fewer items and sticking to supermarket own-brand goods in a bid to save money. People are also preparing simpler dishes with fewer ingredients, according to Kantar.
The year-on-year impact of grocery inflation on typical summer purchases is hitting hard too with ice cream prices up 20%, mineral water up 17%, sausages up 16% and burgers up 13%.
Discounter Aldi was the fastest-growing retailer for the 12 weeks to June 11, with sales rising nearly 25%, pushing its market share up to a record 10.2%. Lidl was close behind, with sales rising more than 23%.
Last week, Tesco Plc CEO Ken Murphy said there are signs that grocery inflation is starting to ease after the grocer recently cut prices on bread, pasta and broccoli. Britain’s biggest supermarket also expanded its price match with Aldi and dismissed the idea of profiteering.
Still, “it’s unlikely that prices will return to where they were,” he warned.
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