Food inflation declined for the 16th consecutive month, according to industry data released ahead of the general election, which also shows a price war aimed at attracting fans during Euro 2024.
Kantar Worldpanel – which monitors supermarket prices, sales and market share – said its measure of food inflation slowed to 2.1% in the four weeks to June 9, from 2.4% in the previous month.
That left the figure at its lowest level since October 2021 – just months before the war in Ukraine sparked an unprecedented jump in cash prices, making it a key pillar of the energy-driven economy. cost of living crisis.
The report showed that there is still upward pressure on the costs of items such as chilled fruit juices, vitamins and supplements, and chocolate confectionery – the latter a consequence of bad cocoa harvests.
Prices fell even faster on toilet paper, butter and milk, the study found.
Kantar said that despite progress in reducing the pace of price increases at tills, which included the impact of inter-chain discounting, its survey work showed that 22% of supermarket customers continue to struggle to make ends meet.
UK economy stagnates in April
A larger proportion of shoppers, however, were feeling better.
The report suggested that 36% considered their financial situation to be “comfortable”, a level not surpassed since November 2021.
This can be mainly explained by wage growth exceeding inflation for more than a year. Official data last week showed basic pay increased at a rate of 6%.
But despite improving personal finances, Kantar reported an impact on revenue growth figures among grocery traders. He blamed the slowdown in food inflation and the impact of the sixth wettest spring on record.
It said consumers purchased almost 25% fewer sun protection items during the four-week period compared to last year, while prepared salads fell 11%. Sales of fresh soups, on the other hand, increased by almost 24%.
Fraser McKevitt, head of retail and consumer insights at Kantar, said the promotional competition for business between supermarkets has evolved to target football fans.
England and Scotland compete at Euro 2024. Photo: Reuters
“With the men’s European Football Championship underway, supermarkets will be waiting to see if the positive performances of England and Scotland can also deliver a win at the checkout.
“Grocery stores are looking to attract consumers taking advantage of this year’s tournament, with the proportion of beer and lager sales on sale jumping to more than 40% in the last four weeks.
“Retailers will compete with fans leaving home to watch football and with each other.
“Pubs especially could benefit from a boost – whether football comes home or not.
“During the last tournament held in 2021, sales of food and non-alcoholic drinks in bars soared by 60% compared to the average for the month of that year.”
Kantar’s report was the last before the election and released less than 24 hours before the latest official inflation figures.
They are highlighted by a survey of economists, carried out by the news agency Reuters, which shows that the main measure of inflation, the consumer price index (CPI), slowed to 2% in the 12 months to May, from 2.3% in the previous month.
This would leave the rate level at the Bank of England’s 2% rate target.
However, the progress is not expected to result in an interest rate cut on Thursday because the majority of the Bank’s rate-setting committee is concerned that inflation could rise again during the second half of the year.
Financial markets currently see only a 9% probability that the bank rate will be reduced from 5.25% to 5% this week.
This story originally appeared on News.sky.com read the full story
