UK grocery inflation drops for the first time in nearly two years

UK grocery inflation dipped for the first time in 21 months in November, following a record high of 14.7% in October.

The dip – to 14.6% – is just 0.1 of a percentage point. It marks the first time since spring 2021 that UK grocery price inflation has declined, according to market research firm Kantar .

The company added that shoppers would have to pay an additional GBP£60 (US$72.99) to purchase the same basket of goods they did the same time last year.

December is predicted to be a record-breaking month for retailers, with holiday spending and higher prices contributing to a consumer splurge of GBP12bn over the course of the month. The football World Cup, however, has yet to have a significant impact on retail sales.

Fraser McKevitt, head of retail and consumer insight at Kantar, said: “We haven’t seen a big World Cup effect – at least not yet. Take-home beer sales nudged up slightly in the last four weeks, covering the first week of the tournament, by 5% to GBP230 million, but mostly due to increased prices.

“Many people are taking the chance to enjoy a social pint while watching the games in bars and pubs, whereas last year we were in the middle of a COVID resurgence so consumers were limiting their movements and going out less. We’re likely to be marking the impact of that comparison with higher at-home volumes one year ago.  Crisp and snacks have fared better this winter, however, with sales up by 18%.”

Kanter noted the sale of retailers’ own label brands is up by 11.7% year-on-year, pointing to evidence of consumer trade-down.

Discount retailers LIDL and Aldi have benefitted from the tightening of consumers’ belts. Lidl’s year-on-year sales have risen by 22%, with Aldi up by 24.4%. With the exception of Waitrose and Morrisons , all other physical retailers have experienced year-on-year growth, however the highest of these outside the German discounters listed were Asda and Iceland, which both grew by 6.1%.

Grocery inflation has been rampant across both the UK and much of Europe, with many nations including Germany and Ireland posting record breaking figures in the last quarter.