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(Alliance News) - UK grocery price inflation cooled to a seventh-month low of 11% in the four weeks to October 1 as prices of staple foods dropped, according to survey data from Kantar on Tuesday.
It marks the lowest rate since June last year. In the same period, take-home grocery sales rose 9.1% from the prior year.
"For the first time since last year, the prices of some staple foods are now dropping and that's helping to bring down the wider inflation rate. Dairy was one of the categories where costs really shot up last autumn but the average price paid for a 250g pack of butter is now 16 pence less than 12 months ago," said Tom Steel, strategic insight director at Kantar.
In the longer 12-week period to October 1, grocery price inflation was 11.7%, with prices in categories such as eggs, sugar confectionery and frozen potato products rising at the fastest pace.
Total grocery sales across the 12-week period were up 7.7% year-on-year to GBP32.45 billion from GBP30.14 billion.
"Supermarkets are looking at all the different ways they can deliver value at the tills and while the emphasis for some time has been on everyday low prices, the retailers are starting to get the deal stickers out again. Spending on promotions made up over a quarter of all sales in the latest 12 week period at 26.5%, the highest level since June 2022," Steel noted.
There were strong sales performances across the period from Tesco PLC, J Sainsbury PLC and Ocado PLC.
Tesco's sales rose 9.2% to GBP8.88 billion from GBP8.13 billion a year before, as its market share rose to 27.4% from 27.0%.
Sainsbury's sales rose 9.1% to GBP4.82 billion from GBP4.42 billion, as its market share edged higher to 14.8% from 14.7%.
German discounters Lidl and Aldi continued to see the strongest growth, however, as shoppers looked for discounts amid cost-of-living pressures.
Lidl sales rose 15% to GBP2.48 billion, reaching 7.6% market share from 7.1%. Aldi sales also climbed 15% to GBP3.20 billion, with market share expanding to 9.9% from 9.3%.
It was also a more positive period for Ocado Retail, an online grocery joint venture between Ocado Group PLC and Marks & Spencer Group PLC. Sales rose 9.6%, as its market share edged up to 1.7% from 1.6%.
Meanwhile, Asda sales rose just 2.9%, with its market share dropping to 13.7% from 14.3%. Morrisons sales also underwhelmed, rising 2.1%, as its market share ebbed to 8.6% from 9.0%.
Shares in Tesco were up 0.8% at 276.70 pence each in London on Tuesday morning, as Sainsbury's shares rose 1.9% to 255.40p, and Marks & Spencer climbed 1.6% to 224.50p, as Ocado jumped 4.3% to 586.80p.
By Elizabeth Winter, Alliance News senior markets reporter
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