By James Davey
LONDON (Reuters) - British grocery prices rose this month at their lowest rate since March 2022, as supermarket promotions picked up after a post-Christmas slowdown, industry data showed on Tuesday.
Market researcher Kantar said annual grocery price inflation was 5.3% in the four weeks to Feb. 18, down 1.5 percentage points from the previous four-week period.
"Consumers have been navigating a grocery inflation rate of more than 4% for two years now, so this latest easing of price rises is especially welcome," Tom Steel, strategic insight director at Kantar, said.
It will also be welcomed by the Bank of England, which is monitoring food prices closely.
Steel said UK consumers’ spending on offers increased by 4% in February, worth 586 million pounds ($743 million) more than the same month in 2023.
He also noted that this month, Morrisons became the latest grocer to launch a price match scheme with discounters Aldi and Lidl, after Asda made the move in January.
Kantar said prices are rising fastest in markets such as sugar confectionery, chocolate confectionery and frozen potato products, and are falling fastest in butter, milk and toilet tissues.
Separate data from the British Retail Consortium on Tuesday showed overall prices in UK shops also rose at the slowest pace in nearly two years this month, adding to signs of easing inflationary pressures.
Kantar said take-home grocery sales rose in value by 5.1% year-on-year over the four week period.
It said Lidl was the fastest growing grocer in Britain for the sixth month in row, with sales up 10.9% over the 12 weeks to Feb. 18.
No. 2 player Sainsbury's was the second fastest growing, with sales increasing 7.6%, while sales at market leader Tesco (OTC:TSCDY) rose 6.2%.
Asda and Morrisons were again the laggards, with growth of 1.9% and 3.1% respectively.
UK supermarkets' market share and sales growth (%)
Market share Market share % change in
12 wks to 12 wks to sales
Feb. 18 2024 Feb. 19 2023 (yr-on-yr)
Tesco 27.6 27.3 6.2
Sainsbury's 15.6 15.2 7.6
Asda 13.8 14.3 1.9
Aldi 9.4 9.4 5.7
Morrisons 8.8 9.0 3.1
Lidl 7.5 7.1 10.9
Co-operative 5.3 5.5 1.4
Waitrose 4.6 4.7 3.8
Iceland 2.3 2.4 2.1
Ocado (LON:OCDO) 1.9 1.9 4.9
Source: Kantar
($1 = 0.7888 pounds)