UK grocery inflation slows in January, says Kantar

London: The pressure on British consumers eased a little in January as a step-up in supermarket promotions meant grocery inflation edged lower following four straight months of rises, industry data showed on Tuesday.

Market researcher Kantar said annual grocery price inflation was 3.3% in the four weeks to Jan. 26, down from 3.7% in last month’s report. Sales rose 4.3% over the period year-on-year.

Kantar said the fall in inflation reflected an increased level of promotions from supermarkets. They rose year-on-year by 274 million pounds ($340 million), accounting for 27.2% of sales – the highest level in January since 2021.

In the early hours of Tuesday morning, hundreds of people crowded the port in Santorini to board a ferry and reach safety in Athens.

The researcher said prices are rising fastest in products such as chocolate confectionery, chilled smoothies and juices, and butters and spreads, and are falling fastest in cooking sauces, household paper products and cat food.

Despite the January fall in food inflation, supermarkets have warned that tax rises in the new Labour government’s first budget in October, together with another hike in the national minimum wage, will be inflationary.

Prominent grocery industry researcher, the Institute of Grocery Distribution has forecast that food inflation could hit nearly 4.9% this year.

Kantar noted that consumers turned to non-branded products to help keep costs down, with own-label as a proportion of total sales hitting a record high of 52.3% in January.

Online supermarket Ocado (OCDO.L), opens new tab was Britain’s fastest-growing grocer for the ninth consecutive month, with sales up 11.3% year-on-year over the 12 weeks to Jan. 26.

Market leader Tesco gained the most share, with its 28.5% share some 70 basis points higher year-on-year, on sales up 5.6%. Sales at No. 2 Sainsbury’s (SBRY.L)