UK grocery inflation drops to 3.2% in April, driven by increased promotional activity: Kantar

UK inflation: UK grocery price inflation continued its downward trend for the 14th consecutive month in April, driven in part by a surge in promotional activity by supermarkets, according to industry data released on Tuesday by market researcher Kantar.

Annual grocery price inflation stood at 3.2 per cent in the four weeks ending April 14, a decrease from 4.5 per cent recorded in the previous four-week period. Kantar highlighted that items purchased on offer constituted 29.3 per cent of supermarket sales during this period, marking the highest level outside of the Christmas season since June 2021.

Fraser McKevitt, head of retail and consumer insight at Worldpanel by Kantar, attributed the decline in grocery inflation to the emphasis on promotional offers and falling prices in certain categories such as toilet tissues, butter, and milk. However, McKevitt cautioned that prices continued to rise, notably in markets such as sugar and chocolate confectionery, as well as chilled fruit juices and drinks.

Official data published last week indicated that overall inflation in the UK fell to 3.2 per cent in March, partly due to a slowdown in food inflation to 4 per cent. Prime Minister Rishi Sunak has sought to highlight this reduction in inflation as an achievement, although there has been limited evidence of a significant boost in public opinion for his Conservative Party, which trails behind the opposition Labour Party ahead of anticipated elections later this year.

In the realm of grocery retail, online player Ocado emerged as the fastest-growing grocer in the 12 weeks leading up to April 14, with a sales growth of 12.5 per cent. Market leaders Tesco and Sainsbury's also demonstrated robust performance, with sales growth of 5.9 per cent and 6.8 per cent respectively, resulting in a year-on-year increase in market share for both.

Discount retailers Lidl and Aldi experienced sales growth of 9.1 per cent and 2.8 per cent respectively, though Aldi's market share saw a slight decline. Meanwhile, Asda, the third-largest player, faced challenges with a 0.4 per cent decline in sales and a decrease of 60 basis points in market share, contrasting with the positive tone of its 2023 financial results released earlier this week.

Kantar also highlighted a milestone in online grocery sales, with total online sales reaching a share of 12.0 per cent, marking the highest level since July 2022.

(With Reuters inputs.)