Grocery Prices Slightly Up in August

Grocery price inflation has risen for the first time since March last year, with supermarket prices increasing by 1.8% year-on-year as of August 4, up from 1.6% in July, according to analysts at Kantar. This uptick follows a significant decline over 17 consecutive months, where inflation dropped from a peak of 17.5% to its lowest level since September 2021. The current inflation rate reflects a return to average levels seen prior to the cost-of-living crisis. Consumers are experiencing a varied pricing landscape, with prices rising across 182 product categories while 89 categories saw price reductions. Fraser McKevitt, head of retail and consumer insight at Kantar, noted that the recent increase, although slight, is significant after a prolonged period of decline. He emphasized that the type of products shoppers choose will greatly influence their overall spending. In response to rising prices, consumers are increasingly taking advantage of promotions, with spending on deals rising by 15%. Notably, sales of products at regular prices have remained stagnant. The recent warm weather has also spurred sales in certain categories, with ice cream and burgers seeing increases of 23% and 32%, respectively. Sainsbury’s has reported its largest year-on-year market share gain since July 1997, with a 0.5 percentage point increase, while Tesco continues to grow its market share, reaching 27.6% with a 4.9% rise in sales. This trend highlights the competitive landscape among traditional supermarkets as they adapt to changing consumer behaviors.