Grocery inflation jumps to highest level in more than a year
Grocery price inflation shot up to 4.1 per cent in May, driven by chocolate and suncare products in the hottest start to the month on record.
The rise follows a 3.8 per cent jump in April and a 1.8 per cent rise in March, according to Kantar.
“This latest jump in grocery price inflation takes us into new territory for 2025,” Fraser McKevitt, head of retail and consumer insight at Kantar, said.
“Households have been adapting their buying habits to manage budgets for some time, but we typically see changes in behaviour once inflation tips beyond the three to four per cent point as people notice the impact on their wallets more,” he added.
Fresh data from the British Retail Consortium (BRC) earlier this week similarly found that food prices were on the rise.
The increase was particularly stark for fresh foods like steak, which have been affected by a rise in wholesale prices.
The BRC also warned that a higher cost burden for retailers in the form of a new packaging tax and higher employers’ national insurance contributions (NICs) would contribute to higher prices in the future.
Ocado marks a year as Britain’s fastest growing grocer
Kantar also released data on UK grocers’ market share in the 12 weeks to 19 May.
Sales at Ocado increased 14.9 per cent over the three months, meaning the online retailer has spent a full year as Britain’s fastest-growing grocer.
Discounters, too, saw a strong start to the year, with their strongest combined growth since January 2024 at 8.4 per cent.
Lidl brought 419,000 extra shoppers through its doors compared with the same period last year, the most of any retailer, according to Kantar.
The UK’s biggest grocer Tesco continued to boost sales, up 5.9 per cent to £9.38bn. It now holds 28 per cent of the UK market.
Asda recorded its best three-month performance since May last year, with its share price at 12.1 per cent.
Returning chair Allan Leighton has driven a significant turnaround at the TDR-owned grocer, talking of a “war chest” with which to drive down prices and compete with stalwarts Tesco, Sainsbury’s, Morrisons and the discounters.