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Shoppers benefit from lower grocery inflation

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Lower grocery inflation is benefitting shoppers with prices now at their slowest rate for 18 months, it has been announced today.

According to research group Kantar Worldpanel’s latest grocery share figures, grocery inflation now stands at 3.2 per cent for the 12 weeks ending August 5th 2012 continuing the downward trend following last November’s peak of 6.2 per cent.

The grocery market is now growing at 3.9 per cent compared to 2.1 per cent in June, a sign that the grocery market is bouncing back despite fierce competition.

Fracis McKevitt, retail analyst at Kantar, explained: “Shoppers might not yet notice it at the tills, but they are starting to benefit from lower grocery inflation, with prices now rising at 3.2 per cent– the slowest rate for 18 months and a sign that things are starting to look up.

“Despite this, consumers are still seeking economy products and retailers are reflecting this demand in their store offerings. The lowest priced own label lines, such as Tesco Everyday Value, are growing at 13 per cent while premium own label sales are falling by 4 per cent year-on-year.”

Discount grocers Aldi and Lidl have maintained double-digit growth over the period, with market share now standing at 26 per cent and 11.8 per cent respectively, while midmarket supermarket chain Asda reported 6.2 per cent growth.

Meanwhile grocery giant Tesco, which was downgraded by ratings agency Standard & Poor’s following a decline in profitability, continues to lose share, though this is now at a slower rate as it works to close the gap on its rivals.

Last week, global insights firm Nielsen reported that aggregate sales growth across the big four supermarkets rose 4.1 per cent year-on-year over in the week prior to the London Olympic Games, though McKevitt warned that it is too early to say what effect the Olympics will have on the sector.

He commented: “It’s too early to attribute improved grocery sales to the Olympics, however, the increased market growth rate coincides with the opening week of London 2012 and the better weather in July.”

Published on Tuesday 14 August by Editorial Assistant

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