Market Analysis

In June, data from industry experts revealed that UK grocery inflation continued its downward trend for the sixteenth consecutive month, offering a bit of relief for Prime Minister Rishi Sunak ahead of the upcoming election in July.

According to Kantar, a market research firm, the annual grocery price inflation stood at 2.1% in the four weeks leading to June 9, down from 2.4% in the previous four-week period.

While Sunak has been trying to take credit for the significant reduction in overall inflation during his campaigning, the Conservative Party hasn't seen a noticeable surge in opinion poll ratings compared to the opposition Labour Party.

Kantar's analysis indicated that prices decreased in nearly a third of the grocery categories monitored, including items like toilet tissues, butter, and milk. However, certain markets such as chilled fruit juices and chocolate confectionery witnessed price hikes.

Tesco, the leading player in the market, projected "very low single-digit" food inflation for the remainder of 2024.

Official data released on May 22 showed that overall consumer price inflation dropped to 2.3% in the 12 months up to April. The inflation figures for May were due to be published on Wednesday, just before the Bank of England's next policy announcement on Thursday.

Kantar's latest data, providing insights into UK consumer behavior, highlighted a 1.0% increase in year-on-year take-home grocery sales in terms of value over the four-week period, marking the slowest growth since June 2022. This was attributed to adverse weather conditions and the declining inflation rate.

Fraser McKevitt, Kantar's head of retail and consumer insight, pointed out unusual purchasing patterns for June, with a significant decrease in purchases of suncare items and prepared salads, but a notable surge in fresh soup sales.

Supermarkets are pinning hopes on a boost from the Euro 2024 soccer championship, with promotions on beer and lager sales exceeding 40% in the latest four weeks.

During the 12-week period leading to June 9, online supermarket Ocado emerged as the fastest-growing grocer, alongside Tesco, Sainsbury's, and discount chain Lidl, all gaining market share. On the flip side, Asda continued to lose market share, dropping by 90 basis points compared to the previous year.

Paraphrasing text from "Reuters" all rights reserved by the original author.