May 23, 2023
Food inflation in the UK has seen a slight fall for the second month in a row, according to the latest data from Kantar. The annual rate of grocery price increase was 17.2% in the four weeks to May 14, down from 17.3% in April. However, this is still the third highest rate of grocery inflation since 2008, and it means that UK households are paying an extra £833 a year on their food bills if they do not change their shopping habits.
The main drivers of grocery inflation are products such as eggs and ambient cooking sauces, which have seen significant price rises over the past year. The average cost of four pints of milk has dropped by 8p since last month, but it is still 30p higher than a year ago. Consumers are trying to cope with the high prices by switching to more own-label products, which grew by 15.2% over the month, almost double the growth of branded products.
The discounters Aldi and Lidl were the fastest growing grocers in May, with sales growth of 24.0% and 23.2% respectively. They attracted more shoppers looking for bargains and lower prices. Waitrose also performed well, with sales growth of 4.8%, the highest in more than two years. The coronation of King Charles boosted sales of wine and quiche, as people celebrated the royal occasion with extra treats.
Grocery inflation is expected to decline gradually over the year, as some of the products that saw the sharpest price increases, such as milk, butter, bread, pasta, and oil, have started to fall. However, consumers will still face a cost-of-living crisis as overall inflation remains high and wages stagnate. The Bank of England has warned that inflation will fall more slowly than expected, mainly due to persistent rises in food prices.
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