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Grocery price inflation drops to new two-year low

26 Mar 2024 2 minute read

Grocery price inflation has dropped to a new two-year low but almost a quarter of households say they are still struggling financially, according to latest figures.

Supermarket prices were 4.5% higher than a year ago in March, the lowest inflation rate since February 2022 and a significant drop from last month’s 5.3%, according to analysts Kantar.

Despite the continued slowdown, 23% of British households identify themselves as struggling financially – the same proportion as in November last year, according to a survey by Kantar Worldpanel of more than 10,700 people at the end of January.

Cheaper groceries

Among those feeling the most pressured, 78% are actively buying cheaper groceries while 68% are using promotions to help manage budgets, with £605 million more spent on deals this month than in March last year.

Sales of branded goods pushed ahead of own label products in March. However, premium own-label lines grew by a “whopping” 16.1% this month – the quickest rate seen by Kantar in almost three years.

Fraser McKevitt, head of retail and consumer insight at Kantar, said: “Grocery inflation has come down significantly since hitting an eye-watering peak of 17% in March 2023.

“However, despite this continued slowdown, many British households are still feeling the squeeze.”

PA Graphics.

Financial woes have not stopped consumers spending £88 million more on Easter treats in the first three months of this year than last year, with volume sales of hot cross buns up by 15%, although the event falls 10 days earlier this year than last year.

Take-home grocery sales in general overall rose by 4.6% over the four weeks to March 17.


Mr McKevitt said: “With Easter on the horizon, consumers have been stocking up on classic seasonal treats, with a quarter of people picking up four or more items when buying chocolate eggs.

“This rises to 29% for shoppers aged over 65, suggesting that many grandparents are planning to indulge their families this weekend.”

Ocado was the fastest growing retailer in March, improving sales by 9.5% in the last 12 weeks, well ahead of the total online market which rose by 6.6%.

Year-on-year sales at Tesco and Sainsbury’s climbed by 5.8% and 6.7% respectively, taking them to market shares of 27.3% and 15.2% respectively.

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