Yahoo Finance UK inflation: Milk, butter and pasta prices drop
UK grocery inflation dropped into single digits for the first time since July 2022, with prices of milk, butter and dried pasta falling.
Grocery prices were 9.7% higher than a year ago over the four weeks to 29 October, down from the previous month’s 11%, analysts Kantar said.
Take-home grocery sales over the same period continue to lag behind inflation, rising by 7.4% compared with last year.
It is the eighth consecutive decline in the rate of price rises since the figure peaked at 17.5% in March, and the first time the figure has fallen below 10% since July last year.
“While the drop … is positive news and something of a watershed, consumers will still be feeling the pinch,” Fraser McKevitt, head of retail and consumer insight at Kantar, said.
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However, despite the milestone, consumers are only seeing year-on-year price falls in a limited number of categories, including butter, dried pasta and milk, according to Kantar’s data.
The average price paid for a standard bottle of sparkling wine fell from £7.46 in August to £6.86 in October — a drop of 8%.
Spending on promotions hit 27.2% of total grocery sales as shoppers continue to try to cut their bills. This is the highest level since last Christmas and a significant increase since last October when the figure was less than a quarter.
Meanwhile, own label lines continue to grow ahead of brands, as they have for every month since February 2022, with the latest four weeks showing a sales boost of 8% for these lines. However, that gap could close by the festive season.
All of the UK’s major supermarket groups have cut the prices of some essential products in recent months.
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“Retailers continue to look at ways of softening the blow for shoppers and slowing the rate of price rises,” McKevitt said.
“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 10 years,” he added.
Lidl was again the fastest-growing retailer in October, with sales over the last quarter up by 14.7% to take a market share of 7.6%.
Fellow discounter Aldi sat beside Waitrose as one of only two grocers to increase its number of shoppers year-on-year, attracting 207,000 more customers than last year.
Aldi and Waitrose increased their sales by 13.2% and 5.4% respectively to take 9.7% and 4.6% of the market.
Myron Jobson, senior personal finance analyst at Interactive Investor, said: “Food inflation easing back to a single digit level is a psychological milestone that will make many Britons feel good about where prices are heading.
"Britons have been force fed a diet of higher costs for basic necessities for a prolonged period. The fact that we’re seeing some easing in food inflation is really important for shoppers."
Watch: Grocery inflation 'back in single digits' — as supermarket with fastest sales growth named
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