Yet Another Glimmer Of Light For Rachel

Posted on Feb 05, 2025. by NTI

Figures released earlier this week by Kantar (an international market research company) could be good news for government (well Rachel Reeves mostly) as UK grocery inflation (which has driven inflation) has slowed for the first time in six months.

The price of groceries increased by 3.3%, a slight drop from 3.7% in December, as the costs of toilet roll and cat food fell but those of chocolate, butter and chilled juices rose, according to analysts at Kantar.  So, as someone who likes chocolate and doesn’t have a cat, I might not have seen it all.

Despite this, grocery inflation has increased every month since August, when it was 1.7% according to Kantar, but it is still well below the double-digit figures recorded in 2023.

However, we think the key takeaway from the news is that more than a quarter of sales – 27.2% to be precise – had been items on promotion in the four weeks to 26 January, the highest level in four years. Spending on those discounted items rose by 9.4%, well ahead of the wider market.

Fraser McKevitt, the head of retail and consumer insight at Kantar, said: “Supermarkets were dishing out the discounts this new year, and consumers responded. Spending on promotions rose year on year by £274m.” He added spending on supermarkets’ own-label products also rose, by 5.4%, to a record high of 52.3% of sales.

Turning to how each individual supermarket fared, Lidl was the fastest-growing, with sales up 7.4% in the three months to 26 January.  Asda, the UK’s third-largest supermarket, continued its downward trend, with sales down 5.2% – the only big chain at which sales fell.

Ocado was the fastest-growing grocer for the ninth consecutive month, where sales were up 11.3%. Its co-owner Marks & Spencer also continued its strong run as sales increased by 10.5% in its physical stores.

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