UK Grocery-Price Inflation Reaches Lowest Level

According to the latest report from market-research firm Kantar, U.K. grocery-price inflation has decreased for the sixth consecutive month, hitting its lowest level in more than a year.

Decreasing Inflation Rate

Inflation for groceries in the four-week period leading up to Sept. 3 dropped to 12.2% from August's 12.7%. This decline moves further away from the record high of 17.5% observed in March.

Consumer Concerns Persist

Although inflation is decreasing, the Kantar report highlights that 95% of consumers are still worried about the impact of rising grocery prices. Their concern about energy bills is the only issue that matches this level of distress.

Discount Retailers Flourish

Discount retailers continue to benefit from the inflationary backdrop as consumers seek out bargains. German supermarket Aldi has become the fourth-largest supermarket in Britain, and along with Lidl, it has seen significant market-share gains over the past year.

In August, Aldi's sales rose by 17.1%, while Lidl's sales increased by 16.0%. Combined, they now hold 17.7% of the sector.

The growth in market share can be attributed to an increase in own-label sales, which currently make up more than half of all consumer purchases.

Despite strong performance, both Aldi and Lidl have experienced a slowdown in growth rates in recent months as they compare against rapid rises last year.

Traditional Retailers Show Growth

Among traditional retailers, Tesco and Sainsbury's were the fastest growers, with sales increasing by 9.3% and 9.1%, respectively. Tesco currently holds a market share of 27.2%, while Sainsbury's stands at 14.8%.