Grocery inflation 'back in single digits' - as supermarket with fastest sales growth named

The pace of grocery inflation has eased back to single digits for the first time since July last year, according to closely-watched industry data.

Kantar Worldpanel, which records supermarket sales and price data, put the annual rate at 9.7% during the four weeks to 29 October.

It said the decline, from the 11% recorded over the previous four weeks, was still mainly driven by discounting as chains sought to bolster customer loyalty in the run-up to the crucial season for Christmas sales.

The report pointed to limited contributions elsewhere as only butter, pasta and milk were among everyday items that cost less than a year ago.

Fraser McKevitt, Kantar's head of retail and consumer insight, said: "Retailers continue to look at ways of softening the blow for shoppers and slowing the rate of price rises.

"This has included upping the ante on promotions - every single one of the grocers increased the proportion of sales through deals versus last year, which is something that has only happened on one other occasion in nearly 10 years.

"Consumer spending on promotions has now hit 27.2% of total grocery sales - the highest level we've seen since Christmas last year.

"This is a big gear shift from October 2022 when this figure was less than a quarter."

That promotional activity was stripped away after Christmas as consumers and businesses alike faced rising costs on many fronts, including energy bills.

The report said that while the latest easing in grocery inflation would be welcome, it was clear shoppers were continuing to feel the pinch as own label sales remained ahead of branded lines in terms of demand.

Own label lines have grown ahead of their branded counterparts every month since February 2022.

However, that gap could close by the festive season.

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A separate report released on Tuesday suggested shoppers were holding off on discretionary spending last month, amid the wider cost of living crisis, to save money for Christmas.

According to the Barclays' Consumer Spending Index, of those seeking savings 45% were using vouchers or loyalty points to get money off shopping, while 38% were visiting multiple supermarkets to source a range of deals.

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Kantar declared that Lidl saw the fastest sales growth among chains during October, while Sainsbury's made the most progress among the more established supermarkets.