Britons cut back on supermarket shopping and traditional summer shopping due to recent bad weather, although food price inflation slowed further, according to the report.
In the four weeks to June 9, supermarket prices were 2.1% higher than a year ago, according to retail researchers Kantar. That’s lower than May’s inflation rate of 2.4% and marks the 16th month that price growth has slowed. Kantar found that costs are falling in almost a third of the categories it tracks, including toilet paper, butter and milk, an improvement on last year when only 1% of categories saw price falls.
The monthly report comes on Wednesday ahead of official UK inflation data for May. Headline inflation is expected to fall from 2.3% in April to 2%, the target set by the government.
Fraser McKevitt, head of retail and consumer insight at Kantar, said that despite falling food inflation, “the cost of living crisis is not over – far from it”. He said 22% of households said they were struggling, unable to meet their expenses or just making ends meet.
McKevitt added: “However, there are positive signs that many of us no longer feel the need to cut our spending so much, with lower inflation helping to ease the pressure on people’s pockets.”
Although 36% of households described their financial position as comfortable – the highest share since November 2021 – sales rose just 1% in June, the slowest increase since June 2022, Kantar said. The footprint also dropped.
The wet weather meant shoppers bought nearly 25% fewer sun care products compared to last year and 11% fewer prepared salads. At the same time, sales of fresh soup jumped by almost 24%.
McKevitt said: “The sixth wettest spring on record has not only dampened our spirits leading up to summer, it has also affected the food sector as it appears to be putting Britons off shopping.
“We’re not reaching for the typical summer products yet, and we’re making purchases that you wouldn’t expect in June.”
Supermarkets and pubs are hoping for good performances by England and Scotland at Euro 2024 to boost spending, with the share of beer and lager promotions jumping to more than 40% in the past four weeks.
“Retailers will be competing with fans who leave the house to watch football, as well as with each other,” McKevitt said. “Pubs in particular could benefit from a boost – whether the football comes home or not. During the last tournament held in 2021, food and soft drink sales in pubs increased by 60% compared to the average month of that year.”
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Tesco consolidated its position as the UK’s biggest supermarket with a market share of 27.7% after sales rose 4.6% in the three months to June 9 compared with the previous year. Sales at all major supermarkets were up over the period, apart from Asda, which was up 4% and the Co-op up 2.3%.
Ocado was the fastest growing grocer for the fourth month in a row, increasing sales by 10.7% in the 12 weeks to 9 June. Almost a quarter of UK households (23%) bought groceries online in the last three months, with over 4% choosing to use Ocado.
Discounter Aldi, the fourth-biggest retailer by consumer spending, increased sales by 0.8%. It now has a 10% stake.