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Food price inflation in UK falls for fifth month in a row

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Food price inflation in the UK eased to 12.7% last month, the second sharp drop in a row, as the price of milk fell back but eggs, sweets and oven chips continued to increase.

Price rises slowed for the fifth month in a row in the four weeks to 6 August, the market research group Kantar reported on Tuesday.

Fraser McKevitt, the head of retail and consumer insight at Kantar, said the 2.2 percentage point reduction in the pace of price rises was the second sharpest month-on-month fall in inflation it had recorded since 2008.

“Prices are still up year on year across every supermarket shelf, but consumers will have been relieved to see the cost of some staple goods starting to edge down compared with earlier in 2023. Shoppers paid £1.50 for four pints of milk last month, down from £1.69 in March, while the average cost of a litre of sunflower oil is now £2.19, 22 pence less than in the spring,” McKevitt said.

Shoppers also continue to find ways to offset the impact of inflation on their household budgets by switching to supermarkets’ own-label products. Sales of own-label items rose 9.7% over the four week period, compared with a 6.4% rise in branded products.

The consumer group Which? has called on supermarkets to stock more of their cheapest own-label products in small local stores as it found that some branded food and drink products at supermarkets had more than doubled in price in the last year.

Mr Kipling chocolate slices and bakewell cake slices topped its price increase league with a 129.4% and 98% jump in a year. Yeo Valley yoghurts, Quaker porridge products and Tropicana orange juice also saw price rises of more than 55%.

The hunt for better deals has boosted the discounters Aldi and Lidl. They continued to take a bigger share of spending from their rivals, recording the fastest pace of growth in the market, according to Kantar. Aldi’s sales rose 21.2% and Lidl’s 19.8% in the 12 weeks to 6 August, compared with 9.5% at Tesco, the fastest growing of the traditional chains.

Asda’s sales rose 7.7% over the four weeks, according to Kantar – a slight slowdown in growth from that reported in the previous month as inflation across the market eased.

However, separate figures released by Asda on Tuesday showed sales, excluding fuel, had risen 9.6% in the three months to the end of June, with growth across food, clothing and general merchandise helped by high levels of inflation. The retailer said it had reduced the loss of shoppers to the discounters after updating its loyalty scheme and expanding to its own label range, led by its cut-price Essentials line, driving 14.7% growth in own brand sales.

McKevitt said that as a result of changes in behaviour, the average increase in households’ weekly grocery shop was £5.13 compared with last year, well below the £11.27 extra it would have been if they had continued buying exactly the same items as 12 months ago.

Cool and wet weather meant shoppers switched away from traditional summer fare to more autumnal soups and roasting joints, sales of which rose 16% and 5%. The amount of ice-cream sold slumped 30%, while soft drinks sales were nearly a fifth lower than 12 months ago when the UK was basking in hot, sunny weather. Halloumi, now popular at barbecues, was down by 27%.

The weather put a dampener on spending in supermarkets, with growth in groceries for eating at home slipping to 6.5% in the four weeks to 6 August from 10.4% a month before.

Morrisons continued to struggle, with sales growth of just 2.3%, with only the online specialist Ocado and independent retailers faring worse.

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