According to recent data from Kantar Worldpanel, promotional offers from supermarkets have played a significant role in the continued easing of grocery inflation. Kantar, which tracks sales and pricing information from major chains, reported a 14th consecutive decrease in the annual pace of price increases in its latest report on the sector. The data showed that consumers took advantage of intense competition among rival supermarkets, resulting in a savings of £1.3bn through discounted purchases over the four weeks ending on April 14th. This equates to an average household savings of £46. As a result, the rate of grocery inflation dropped from 4.5% to 3.2%.
Kantar’s report also noted that price decreases for staple items such as toilet roll, milk, and butter contributed to the overall decrease in grocery inflation. In fact, 29.3% of all supermarket sales during this period were from items bought on offer – the highest level since June 2021 outside of the Christmas season. This increase in promotional activity is a result of the ongoing price war among supermarkets that began after the financial crisis, when discounters Aldi and Lidl started gaining market share from established brands. The rise in food costs due to increasing energy and commodity prices has only intensified this competition.
The expansion of discounters like Aldi and Lidl has been beneficial for consumers, not only at their own stores but also at major supermarkets such as Tesco, Sainsbury’s, Asda, and Morrisons. These retailers have had to become more competitive in order to maintain their market shares, which has led to increased investments in price. However, in the latest period, Asda was the only major brand to experience a decrease in market share, falling 0.4% compared to the same period last year.
Fraser McKevitt, Kantar’s head of retail and consumer insight, commented on the findings, saying, “We’ve been monitoring steady annual growth in promotions over the past 11 months as retailers respond to consumers’ desire for value.” He also noted that these deals have resulted in significant savings for shoppers, with the average household saving nearly £46 in the latest four-week period. McKevitt also highlighted the impact of falling prices in certain categories, such as toilet tissue, butter, and milk, in bringing down the overall rate of grocery inflation for consumers at the checkout.
In other business news, the government has reported higher than forecasted borrowing, while Thames Water has warned of a potential surge in bills. Additionally, the CEO of Iceland suffered a collapse during the London Marathon.
