The latest set of food industry data ahead of the election suggests the rate of price growth remains at its lowest level since October 2021, but more than a fifth of shoppers are still struggling to make ends meet.
Food inflation eased for a 16th straight month, according to industry data released ahead of the general election, which also shows a price war aimed at attracting fans during Euro 2024.
Kantar Worldpanel – which tracks supermarket prices, sales and market share – said its measure of food inflation slowed to 2.1% in the four weeks to June 9 from 2.4% the previous month.
The number remained the lowest since October 2021 – just months before the war in Ukraine sparked an unprecedented spike in prices and became a key element of the energy cost of living crisis.
The report showed that there is still upward pressure on the cost of items such as chilled fruit juices, vitamins and dietary supplements and chocolate confectionery, as a result of bad cocoa crop.
Prices continued to fall the fastest for toilet tissue, butter and milk, the study said.
Kantar said that despite progress in reducing the rate of price growth at checkouts, which included the impact of discounting between chains, its survey showed that 22% of supermarket customers continued to have difficulty withdrawing money.
The British economy stagnated in April
However, the majority of shoppers felt better.
The report indicated that 36% see their financial position as “comfortable”, a level not surpassed since November 2021.
This can mostly be explained by the fact that wage growth has been outpacing inflation for more than a year. Last week’s official data showed basic pay rising at a rate of 6%.
However, despite improvements in personal finances, Kantar saw a hit to revenue growth figures among grocers. She blamed easing food inflation and the impact of the sixth wettest spring on record.
It said consumers bought nearly 25% fewer tanning products in the four-week period compared to last year, while ready-to-eat salads fell 11%. Sales of fresh soups, on the other hand, jumped by almost 24%.
Fraser McKevitt, head of retail and consumer information at Kantar, said the promotional competition for business between supermarkets had evolved to target football fans.
“With the UEFA Men’s European Championship now underway, supermarkets will be waiting to see if the positive performances of England and Scotland can also win at the box office.
“Grocers are looking to attract consumers who will enjoy this year’s tournament, with the promotion’s share of beer and lager sales jumping to more than 40% over the past four weeks.
“Vendors will compete with fans leaving the house to watch football, and with each other.
“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.”
Kantar’s report was the last before the election and was released less than 24 hours before the latest official inflation data.
They are tipped by a Reuters poll of economists, which shows the headline consumer price index (CPI) measuring inflation slowing to 2% in the 12 months to May from 2.3% in the previous month.
This would leave the rate level with the Bank of England’s 2% target rate.
However, the progress is not expected to result in a rate cut on Thursday, as most members of the Bank’s rate-setting committee fear a rebound in inflation during the second half of the year.
Financial markets currently see only a 9% chance that Bank Rate will be cut to 5% this week from 5.25%.