Grocery price inflation eases for fourth consecutive month with biggest fall since March peak

Food price inflation is declining for the fourth straight month, with the biggest drop since peaking in March

  • Kantar data shows food price inflation has fallen to 14.9% over the past month
  • Grocery sales also continue to rise, up 10.4 percent in four weeks

Food price inflation fell at the fastest rate since price increases peaked in March 2023 in the past month, industry figures show.

Data from market researcher Kantar shows that annual food inflation fell 1.6 percentage points to 14.9 percent in the four weeks to July 9, compared to 16.5 percent the previous month.

It marks the fourth consecutive month of annual price drops, easing pressure on money-poor Britons at the checkout.

The study showed annual grocery inflation was 14.9 percent in the four weeks to July 9, a 1.6 percent difference from Kantar’s data for June, which was 16.5 percent.

Fraser McKevitt, head of retail and consumer insight at Kantar, said: “That will be good news for many households, although of course the rate is still incredibly high.”

The researcher also revealed that grocery sales rose 10.4 percent year over year on a value basis during the same four-week period.

Although the level of grocery inflation continues to fall, it is still at all-time highs, with prices of eggs, cooking sauces and frozen potatoes rising the fastest.

The current level of food price inflation would mean that households would have spent £683 more on groceries annually to buy the same items as they did a year ago.

But as customers have changed their spending habits to counter high inflation, the average annual increase in household spending is £330.

In June, Tesco CEO Ken Murphy revealed he was optimistic that rampant food inflation may have passed its peak.

He said: “There are encouraging early signs that inflation is starting to ease across the market and we will continue to work tirelessly to ensure customers get the best possible value at Tesco.”

This came after Tesco reported an 8.2 percent increase in comparable store sales in the first three months of the year.

Kantar’s inquiry comes after British food and drink makers cut prices in June for the first time in more than three years, passing lower production costs through the supply chain.

According to the Lloyds Bank UK Sector Tracker, ‘factory gate’ prices paid by wholesalers and retailers have fallen from the previous month for the first time since February 2020.

Annabel Finlay, Managing Director of Food, Drink and Leisure at Lloyds Bank, added: “Last month we saw food and drink manufacturing costs fall for the first time since 2016.

“This has continued into June and can give businesses the confidence and financial footing they need to lower the prices they charge their customers.”

Official data on overall British inflation in June will be published on Wednesday. In May, it stood at 8.7 percent, the highest rate among the world’s major wealthy economies.