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Food prices fall but inflation still too high

Grocery prices have fallen for the second month in a row, but inflation is still at the third-highest rate since records began in 2008.

Food inflation fell for the second month in a row to 17.2 per cent for the four weeks to May 14, 2023, according to the latest grocery price inflation data from Kantar.

Take-home grocery sales rose 10.8 per cent over the month compared with the same period last year.

Kantar head of retail and consumer insight Fraser McKevitt said: “The drop in grocery price inflation, which is down by 0.1 percentage points on last month’s figure, is without doubt welcome news for shoppers but it is still incredibly high – 17.2 per cent is the third-fastest rate of grocery inflation we’ve seen since 2008. This could add an extra £833 to the average household’s annual grocery bill if consumers don’t shop in different ways.

“Of course, shoppers are savvy and they’re skirting higher prices by choosing more own-label goods. These lines grew by 15.2 per cent this month, almost double that of branded products which rose by 8.3 per cent.

“However, the gap between own lines and brands is narrowing in most stores, helped in some cases by loyalty discounts. The recently launched Nectar Prices scheme boosted sales of brands bought on deal in Sainsbury’s, causing them to jump by more than a quarter this period.”

The average cost of four pints of milk came down 8p in the period, although prices are still 30p higher year-on-year. McKevitt said that the supermarkets are fighting to offer value to shoppers, adding “retailers know just how important it is to offer even small savings on staple products.”

Despite the price pressures, the data showed that customers spent an extra £218m over the King’s Coronation long weekend – up 16 per cent for the week year-on-year.

“Shoppers filled up their glasses, with sparkling and still wine especially popular. Sales of these products climbed by 129 per cent and 33 per cent respectively, driven by demand, not price rises, with wine inflation only at 1 per cent,” said McKevitt.

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