Tue Sep 10 00:22:51 UTC 2024: ## Grocery Inflation Eases, but Brits Remain Wary of Rising Costs

Despite a slight dip in grocery inflation, consumer worries about the cost of living remain high, according to new data released by Kantar. While annual grocery price inflation fell to 1.7% in the four weeks ending September 1st, down from 1.8% the previous period, two-thirds of Brits are still concerned about the rising cost of their shopping.

Kantar’s head of retail and consumer insight, Fraser McKevitt, noted that despite the easing inflation, shoppers’ financial confidence has not rebounded. He attributed this to the lingering memory of high prices over the past two years, stating that groceries are the second biggest financial worry for consumers, only trailing home energy bills.

Despite these worries, take-home grocery sales have increased, rising 3% to £33.5 million compared to the same period last year. This surge is attributed to strong demand for lunchbox staples like cereal, fruit bars, and chocolate biscuits.

Grocers are responding to cost-conscious shoppers by offering more promotional deals. The proportion of sales on promotion increased for the 16th consecutive month in August, with over half of grocery baskets including some sort of discount.

This data will likely influence the Bank of England’s upcoming interest rate decision. While most economists anticipate a hold at 5%, the likelihood of a rate cut in November has increased.

The Kantar data also provided insights into individual supermarket performances. Ocado continued its strong run, achieving its fastest growth since May 2021, with sales up 12.9%, significantly outpacing the overall market growth of 4.4%.

Meanwhile, Asda’s market share continued to decline, with sales dropping by 5.6% year-on-year. Lidl saw a 9.1% increase in sales, boosted by digital voucher promotions for bakery items. Tesco captured 27.8% of the market share, its highest since January 2022. Sainsbury’s market share rose to 15.2%, while Waitrose and Iceland saw sales increases of 4% and 4.4% respectively.

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