UK grocery inflation rises to 2.5% as shoppers turn to promotions

UK grocery inflation has strengthened, and shoppers are making greater use of special offers to control their bills. Supermarket prices were 2.5% higher in the four weeks to 4 October than a year earlier, up from 2.3% the previous month, Worldpanel by Numerator said.

Promotion spending was more than £250m above last year’s level. Worldpanel said shoppers were using discounts to afford more expensive products and larger packs.

Fraser McKevitt, head of retail and consumer insight at Worldpanel, said household budgets remained under pressure from the cost of living and petrol ahead of the autumn budget on 28 October. More than half of those surveyed said fuel prices made them very or extremely worried, while almost one in three said the cost was already affecting their finances.

Chocolate prices fall before Halloween

Chocolate confectionery prices were 3% lower than a year earlier. About 1.2 million households bought a pumpkin in the latest four-week period, up 10% year on year, while more than 250,000 bought pumpkin spice coffee.

Sales of hot chocolate and soup rose 41% and 35% respectively in September compared with August, but fell 20% and 4% respectively from the same month a year earlier.

Lidl gains grocery market share

Separate NielsenIQ data showed total till sales at major UK supermarkets rose 1.4% in the four weeks to 3 October, slowing from 1.8% growth in the previous month. Unusually warm September weather supported mineral water and ice-cream sales, which increased 17.4% and 11.7% respectively.

Lidl recorded the strongest market-share gain, with sales up 7.1% and its share reaching 8.6%. Ocado sales rose 12.4%, compared with 5.5% growth for online grocery sales across the sector.

Tesco sales increased 1% and Sainsbury’s 1.3%, with market shares of 27.8% and 15.2%. Asda was the only major grocer to report falling sales, down 0.5%, and held an 11.5% share. Aldi held 10.5%, while Marks & Spencer grocery sales rose 14.9%.