UK supermarket inflation softened to its lowest point so far this year, according to new industry data, though households are increasingly worried about rising prices of food and drink.
Grocery inflation eased to 16.5% for the four weeks to 11 June 2023, down from 17.2% in the previous four-week period, research by Kantar found.
Close to 70% of households are either ‘extremely’ or ‘very worried’ about rising food and drink prices, researchers found, higher than they were at the start of the year.
“Prices rising at 16.5% isn’t something to celebrate and it’s still the sixth highest monthly figure in the past 15 years," said Fraser McKevitt, head of retail and consumer insight at Kantar.
As prices now are now being compared to the increasing rate of grocery inflation seen last summer, McKevitt said this means inflation should continue to fall in the coming months.
“The ongoing squeeze is clearly weighing on the nation’s mind. 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.”
Amid the squeeze from the higher cost of living, more consumers are switching to the cheapest own-brand lines, with spending on value ranges jumping 41% compared to last year.
Supermarkets have been quick to expand their value offerings to meet demand, resulting in this tier becoming the fastest-growing part of the market every month since June 2022.
Another change resulting from inflation, says McKevitt, is that “people are thinking more and more about what they eat and how they cook as the cost of living crisis takes its toll on traditional behaviours.
“The most prominent change we’ve seen is that people are preparing simpler dishes with fewer ingredients."
Among the big grocery chains, Aldi was the fastest growing for the 12-week period to 11 June, with sales up 24.6% to a new record market share of 10.2%, while Lidl increased sales 23.2%, giving it 7.7% of the market.
Morrisons continued its recovery, with sales up 0.8% and a market share of 8.8%.
Kantar said it was the fourth period in a row where Morrisons has shown growth, helped by its value range being the fastest growing in the sector, nearly doubling sales compared to last year.
J Sainsbury PLC (LSE:SBRY) and Asda both grew sales at 10.0%, while Tesco PLC increased sales 8.9%.