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(Alliance News) - UK consumers continued to hunt for deals during their supermarket shopping in January, numbers from Kantar on Tuesday showed, but more limited promotional activity meant price inflation only eased slightly.
Kantar said grocery sales in the 12 weeks to January 21 were up 5.5% at GBP35.85 billion, compared to GBP33.97 billion a year before.
"Items bought on offer accounted for 27% of all grocery spending in January versus 32% last month. Christmas is always a bumper period for deals and the grocers pulled the price lever especially hard in December, as they sought to get shoppers through their doors," said Fraser McKevitt, head of retail & consumer insight at Kantar.
"The overall trend in offers is up versus this time last year, and nearly GBP500 million more was spent on offers this January than in the same month in 2023."
Annual UK grocery price inflation in January eased slightly to 6.8% from a revised figure of 6.9% in December, which was first estimated at 6.7%. McKevitt explained that retailers had "taken their foot off the promotions gas slightly" in January, meaning inflation did not ease as quickly as it had done in December from November, when inflation was running around 9%.
"There's been a lot of speculation about the impact the Red Sea shipping crisis might have on the cost of goods, but the story in the grocery aisles this January is more about the battle between the supermarkets to offer best value, rather than geopolitics," McKevitt continued.
Over the 12-week period, grocery price inflation stood at 7.3%, with prices rising fastest in items such as sugar confectionery, ambient cooking sauces and chocolate confectionery. Prices for butter, milk and toilet tissues were falling fastest.
In the 12 weeks, Tesco PLC saw a 6.3% sales rise to GBP9.91 billion compared to the same period a year before. Tesco's market share ticked up to 27.6% from 27.5%, defending its position as the UK's largest grocer.
J Sainsbury PLC's sales rose 8.1% to GBP5.64 billion, as its market share increased to 15.7% from 15.4%.
Ocado Retail sales rose 4.0% to GBP621 million, as its market share edged down to 1.7% from 1.8%. The online-only grocer is a joint venture between Ocado Group PLC and Marks & Spencer Group PLC.
Meanwhile, German discounters Aldi and Lidl continued to grow ahead of the market. Lid sales rose 12%, while Aldi's rose 7.2%. Lidl's market share rose to 7.5% from 7.1%, while Aldi's edged up to 9.3% from 9.2%.
On the London Stock Exchange early Tuesday, Tesco shares were up 0.1% to 292.80 pence each. Sainsbury's shares were 0.6% higher at 275.50p. Ocado shares rose 0.5% to 568.60p, while M&S was down 0.5% to 254.06p.
By Elizabeth Winter, Alliance News deputy news editor
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