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Insight of the Day: Chocolate Cravings and Bargain Hunts Drive Down UK Food Inflation for 14th Consecutive Month

According to a report by Kantar, UK grocery price inflation has been declining for 14 consecutive months, driven by consumer trends and spending habits. Here are the key takeaways from the article:

1. Chocolate Consumption:

- A significant increase in demand for chocolate during Easter festivities has contributed to the decline in grocery price inflation.

- Kantar reports a surge in chocolate confectionery consumption, with 93 million more instances recorded in the year to June 2023 compared to the preceding decade.

2. Discount Purchases:

- Consumers are increasingly seeking discounts, resulting in a significant rise in discount purchases accounting for 29.3% of supermarket sales.

- Retailers have responded to consumers' desire for value by offering promotions and deals, which have led to substantial savings for shoppers.

3. Fruit Consumption:

- Fruit has gained popularity as a snack choice among Britons, with 314 million more fruit pieces consumed between meals in 2023 than in 2013.

4. Supermarket Competition:

- The competitive landscape of the UK grocery sector is underscored by the success of loyalty cards and price-matching schemes.

- Online retailer Ocado, in partnership with Marks and Spencer, emerged as the fastest-growing grocer, with sales surging by 12.5%.

- Tesco and Sainsbury's have increased their market shares, while Lidl achieved a record 8.0% share, and Aldi reclaimed a 10.0% market share.

5. Impact of Promotions:

- The emphasis on promotions and price decreases in categories such as toilet tissue, butter, and milk has contributed to the reduction in grocery inflation.

- Deals and promotions have translated into substantial savings for shoppers, with an estimated £1.3 billion saved in the latest four-week period, equating to nearly £46 per household.

Overall, consumer preferences for discounts and deals, coupled with changes in dietary choices, have played pivotal roles in driving down grocery price inflation in the UK. This trend indicates a shift towards value-oriented shopping and a competitive environment among grocery retailers.

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