Grocery inflation falls again as prices of some staples drop

Grocery price inflation has fallen again with the average price of a pack of butter now 16p less than a year ago, figures show.

Prices across grocers were 11% higher than a year ago for the four weeks to October 1, down from the previous month’s 12.2%, analysts Kantar said.

It is the seventh consecutive decline in the rate of price rises since the figure peaked at 17.5% in March.

The latest fall was helped by the proportion of groceries bought on offer increasing to 26.5% over the last 12 weeks, the highest level since last June.

Tesco, which Kantar said had been driving the increase in promotions, saw sales rise by 9.2% over the period, with its market share edging up by 0.4 percentage points to 27.4%.

Sales of brands on offer hit their highest rate since January, helping sales grow by 7.3% and narrowing the gap with the 10.1% growth of own-label lines.

Discounter Lidl was the fastest growing retailer with sales up by 15.2% over the quarter to take 7.6% of the market.

However, consumers once again put aside cost-of-living concerns to enjoy the joint warmest September on record, sending sales of ice cream, burgers and dips soaring by 27%, 19% and 10% respectively on the same time last year, while sales of sun care products more than doubled across the month.

The summery temperatures also resulted in sales of Christmas puddings and seasonal biscuits falling by 14% and 29% on a year ago.

Tom Steel, strategic insight director at Kantar, said: “Grocery price inflation is still very high, but shoppers will be relieved to see the rate continuing to fall.

“For the first time since last year, the prices of some staple foods are now dropping and that’s helping to bring down the wider inflation rate. Dairy was one of the categories where costs really shot up last autumn but the average price paid for a 250g pack of butter is now 16 pence less than 12 months ago.”