UK Food Inflation Eases for Fourth Consecutive Month Due to Supermarket Promotions

Supermarket deals have helped drive down the cost of grocery inflation for the fourth consecutive month, according to closely watched data from Kantar Worldpanel.

The inflation measure fell by 1.6 percentage points to 14.9% over the four weeks to July 9th, reflecting a further easing in the cost of many staple goods.

However, there has been a marked shift towards customer spending on promotions, which now account for a quarter of the total market.

The grocery sector's prices are currently being investigated by the Competition and Markets Authority, and Kantar's head of retail, Fraser McKevitt, believes that the shift towards promotions could signal a change in focus by grocers towards offering more value own-label lines.

Sainsbury's rate of sales growth had overtaken that of market leader Tesco over the four-week period, according to Kantar.

The report also noted that customers have saved themselves an average of £353 over the past year by changing their typical grocery habits, such as trading down to cheaper products or visiting different grocers.

The easing of food inflation comes against a backdrop of new concerns about the outlook for food security and many staple food costs.

Prices for corn, wheat, and soybean surged on commodity markets on Monday after Russia formally withdrew from a deal brokered by the United Nations that enabled millions of tonnes of grain exports from Ukraine to reach their destination.

The war in Ukraine has been a major factor behind energy-led inflation in Western economies.

While food inflation is easing, the main rate of inflation in the UK has proved more stubborn to bring down than expected, with the Bank of England suggesting that wage rises, at a rate above 7%, are a factor and too high.

The Bank's governor has also accused companies of looking to make excessive profits.

Official figures on Wednesday are tipped by economists to show that the main Consumer Prices Index (CPI) measure of inflation eased back to an annual rate just above 8% from 8.7% in May.

While energy costs have fallen back, finances are facing an additional squeeze from the effects of