U.K. Grocery-Price Inflation Trends

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In a recent report by market-research firm Kantar, it was noted that U.K. grocery-price inflation saw a decrease in February, marking its lowest rate since March 2022. Retailers are engaging in competitive pricing strategies to attract consumers with lower prices.

Key Findings

Annual grocery inflation stood at 5.3% for the four-week period ending on Feb. 18, a decline from 6.8% in January. The report highlighted an increase in promotional activity post-Christmas, resulting in a 4% rise in consumer spending on offers compared to the previous year, emphasizing the importance of value for shoppers.

Consumption Patterns

The data revealed a significant increase in alcohol sales volumes by 18% following “Dry” January, where consumers abstain from beer, wines, and spirits. Additionally, sales of steak and boxed chocolates surged by 12% and 16%, respectively, during the week leading up to Valentine’s Day. However, there was a decrease in spending on meal deals to £36 million ($45.7 million) from £43 million, as consumers prioritized saving money this year.

Market Performance

Lidl, the German discount supermarket chain, witnessed a sales growth of 11% over the 12 weeks ending on Feb. 18, maintaining its position as the fastest-growing grocer for the sixth consecutive month. Its market share increased by 0.4 percentage points to 7.5%. Meanwhile, fellow discounter Aldi also outpaced the market with a sales growth of 5.7%, retaining a 9.4% market share.

These trends in grocery-price inflation and consumer behavior continue to shape the U.K. retail landscape.

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