Grocery price inflation reaches two year low

Research company Kantar has released its grocery price inflation statistics for February 2024, revealing that the figure has dropped to 5.3 percent and is the lowest grocery price inflation has been in two years, since March 2022.

The figure has fallen by 1.5 percentage points from January however take-home grocery sales were seen to grow in value by 5.1 percent during the four weeks to 18 February 2024.

“Things are looking up for shoppers this February.  Consumers have been navigating a grocery inflation rate of more than four percent for two years now, so this latest easing of price rises is especially welcome,” said Tom Steel, Strategic Insight Director at Kantar.

“Though there’s been lots of discussion about the impact the Red Sea shipping crisis might have on the cost of goods, supermarkets have been pulling out all the stops to keep prices down and help people manage their budgets,” continued Steel.

Will food inflation remain high in 2024?

With Valentine’s Day taking place on 14 February, Brits were keen to celebrate the occasion, with sales of steak and boxed chocolate increasing from 12 percent to 16 percent in the seven day lead up, compared to 2023.

In spite of this, Steel notes that consumers across the UK were still keen to utilise supermarket deals, stating: “£36 million was spent on meal deals costing £10 or more in the week leading up to 14 February.  This figure is slightly down on 2023 when spend hit £43 million, but that’s because consumers chose to make more savings this year through price cuts.  Sales of chilled ready meals and desserts on promotion did particularly well this year.”

In recent weeks, New Food had been reporting on Dry January, a campaign that had more than eight million people taking part this year. However, come the second month of the year, alcohol sales jumped by 18 percent in volume compared to January. In fact, consumers purchased 28 percent more wine and 16 percent more larger and beer.

Looking at supermarkets, Lidl boosted its growth sales by 10.9 percent over the 12 weeks to 18 February 2024, making it the fastest growing grocer for the sixth month running, according to Kantar.

Steel continued: “This month, Morrisons became the latest retailer to launch a price match scheme with Aldi and Lidl, after Asda made the move in January.  More generally, we saw promotions accelerate this month after a post-Christmas slowdown.

“Consumers’ spending on offers increased by 4 percent in February, worth £586 million more than the same month in 2023.  Sainsbury’s and Iceland’s efforts paid off in particular, and they were the only retailers to attract more shoppers through their doors.  The battle between supermarkets’ own-label lines and brands also remains fierce.  Own-label nipped ahead this month, growing sales by 5.5 percent versus branded products at 5.3 percent,” concluded Steel.