Grocery price inflation dips but ‘too soon to call the peak’

Grocery price inflation dipped slightly in April – but consumers are still paying 17.3% more than this time last year, figures show.

Kantar warned that the fall from last month’s 17.5% only meant that prices were not increasing as quickly after 10 months of double-digit growth.

As consumers continued to find ways to manage their household budgets, own label sales were up 13.5% year on year, with the very cheapest value lines soaring by 46%.

However stretched finances still allowed for a record-breaking Easter, with 38 million chocolate eggs and treats bought in the run-up to Easter Sunday – five million more than last year – and hot cross bun sales up 5% on last year.

Fraser McKevitt, head of retail and consumer insight at Kantar, said: “The latest drop in grocery price inflation will be welcome news for shoppers but it’s too early to call the top.

“We’ve been here before when the rate fell at the end of 2022, only for it to rise again over the first quarter of this year.

“It’s important to remember, of course, that falling grocery inflation doesn’t mean lower prices, it just means prices aren’t increasing as quickly.”

Aldi reached beyond a 10% share of the market for the first time this month, hitting 10.1%, while Lidl also hit a new record share of 7.6%.

Lidl was the fastest growing grocer with sales increasing by 25.1%, while Aldi was just behind on 25%.

Mr McKevitt said shoppers were likely to be looking ahead to the three bank holidays in May, including for the Coronation, which could impact grocery sales.

“During the week of the Platinum Jubilee last year they were £87 million higher than the average in 2022,” he said.

“We’ll be keeping a close eye on the data in the weeks to come to see if we get the same effect this time around, including how many of us indulge in a Coronation Quiche. Only half of British households bought a quiche over the past year so it might not be for everyone.”

Asda led the grocers with sales up 8.8% year on year in the 12 weeks to April 16, followed by Sainsbury’s on 8.7% and Tesco at 8%.