Supermarket deals push UK food inflation down to single digits
GROCERY price inflation fell for the eighth straight month in Britain as supermarkets compete to pass on easing cost pressures to shoppers.
Annual price growth dropped to 9.7 per cent in the four weeks to Oct 29 versus 11 per cent a month earlier, according to market research firm Kantar. It’s the first time the figure has been in single digits in 16 months.
Supermarkets are using special offers to entice shoppers away from rivals. “Every single one of the grocers increased the proportion of sales through deals versus last year,” said Fraser McKevitt, head of retail and consumer insight at Kantar, “which is something that has only happened on one other occasion in nearly 10 years.”
The rate of inflation on Britain’s supermarket shelves has steadily fallen since March, when it was above 17 per cent. McKevitt said the vast majority of goods were still more expensive than a year ago.
Discount grocers are still gaining shoppers, with Lidl’s sales growing more than 14 per cent over the past year, the fastest pace among supermarkets. Aldi’s sales rose by more than 13 per cent.
“The typical customer walking through the doors of the discounters is now representative of the country as a whole,” said McKevitt.
J Sainsbury raised its guidance last week as Britain’s second-largest supermarket group said it’s winning over shoppers from the discounters. Sainsbury has invested £118 million (S$196.7 million) since March in keeping prices low on everyday items like cheese, pasta and fish fingers.
Marks & Spencer Group is set to release its half-year results on Wednesday.
Supermarkets are gearing up for the festive season, investing in their premium ranges and unveiling glitzy Christmas adverts. Sainsbury, M&S, Tesco Plc and Waitrose owner John Lewis Partnership have all hired temporary staff to help boost sales over the holiday period. BLOOMBERG
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