Grocery inflation falls to single digits for first time this year but consumers still ‘feeling the pinch’

Take-home grocery sales over the same period also rose by 7.4 per cent compared with last year.

Fraser McKevitt, head of retail and consumer insight at Kantar, noted, however, that year-on-year price falls had only been seen in a limited number of major categories, including butter, dried pasta and milk.

He added: “Grocery price inflation has finally dropped into single digits after 16 months of double digit growth, marking a big milestone for the British public and retailers.

“While the drop to 9.7 per cent is positive news and something of a watershed, consumers will still be feeling the pinch.”

The average price paid for a standard bottle of sparkling wine fell from £7.64 in August to £6.86 in October, a drop of 8.0 per cent.

While prices for low-alcohol beer rose more quickly, Kantar noted that drier celebrations were still evident this month – perhaps aided by the challenge of Sober October – and that volume sales of low-alcohol beer were up by 16 per cent during the month versus a year ago.

Sainsbury’s was the fastest growing traditional supermarket this month, with sales up 10.1 per cent over the 12 weeks to 29 October compared to last year. The retailer now holds 15.2 per cent share, up from 14.9 per cent last year.

Britain’s largest grocery chain, Tesco, gained share for the fourth consecutive month to take 27.4 per cent of the market, an increase of 0.4 percentage points versus a year ago, as year on year sales growth reached 9.5 per cent.

Yorkshire-based Morrisons has now been back in growth for seven months, with sales in the latest period up by 3.2 per cent. It now holds 8.6 per cent of the market, with Asda holding 13.6 per cent.

Co-op’s sales have grown by 5.2 per cent, the fastest rate since March 2021 Its market share stands at 6.0 per cent. Online-only grocer Ocado’s market share has risen to 1.7 per cent, while its year-on-year sales have grown by 12.6 per cent.

Mr McKevitt added: “Retailers continue to look at ways of softening the blow for shoppers and slowing the rate of price rises. This has included upping the ante on promotions – every single one of the grocers increased the proportion of sales through deals versus last year which is something that has only happened on one other occasion in nearly ten years.

“Consumer spending on promotions has now hit 27.2 per cent of total grocery sales – the highest level we’ve seen since Christmas last year. This is a big gear shift from October 2022 when this figure was less than a quarter.”

“It’s now been over a year and a half of pinched pockets and people are continuing to respond by trading down on the items they’re putting into their baskets. Own label lines have grown ahead of their branded counterparts every month since February 2022, with the latest four weeks showing a sales boost of 8.0 per cent for these lines.”

The gap between own label and branded goods is currently at its narrowest since spring last year. Branded sales increased by 6.7 per cent in the latest month.

Mr McKevitt added that these figures may change going into the festive period, when shoppers more typically turn to brands.