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(Alliance News) - Grocery price inflation in the UK cooled by just over two percentage points to 12.7% in the four weeks that ended August 6, the second sharpest slowdown in price in 15 years, according to survey data from Kantar, with staples such as milk and vegetable oil seeing price cuts.
During the same period, take-home grocery sales increased by 6.5% from a year before, slowing from a 10.4% annual rise a month before.
Grocery price inflation in the longer 12-week period to August 6 was 14.4%, Kantar said, with eggs, frozen potato products, and sugar confectionery rising the fastest.
Sales in the 12-week period were up 9.2% to GBP32.96 billion from GBP30.17 billion in the comparable period a year ago.
"Hopes of some sunshine were dashed this July as unseasonable weather put the dampeners on sales of our usual summer favourites," remarked Fraser McKevitt, head of retail and consumer insight at Kantar.
"It was a better month for Barbie than barbecues this July as the rain put a spanner in the works for many consumers' outdoor plans – a stark comparison to last year when we experienced the hottest day on record."
The 12-week sales increase was led by the UK's two biggest supermarket chains, Tesco PLC and J Sainsbury PLC.
Tesco sales rose by 9.5% to GBP8.89 billion from GBP8.12 billion a year before, Kantar said. This improved its market share to 27.0% from 26.9%.
Sainsbury's sales rose 9.3% to GBP4.89 billion from GBP4.48 billion, leaving its market share unchanged at 14.8%.
The big winners continued to be German discounters Aldi and Lidl.
Aldi's sales rose by 21% to GBP3.35 billion from GBP2.76 billion, lifting its market share into double digits, to 10.2% from 9.1%. Lidl's sales increased by 20% to GBP2.53 billion from GBP2.11 billion. Its market share rose to 7.7% from 7.0%.
With less impressive annual sales increases of 7.7% and 2.3%, Asda's market share slipped to 13.7% from 13.9% and Morrison's to 8.7% from 9.3%.
Similarly losing ground was Ocado Retail, an online grocery joint venture between Ocado Group PLC and Marks & Spencer Group PLC. With just 1.4% annual sales growth, Ocado's market share slipped to 1.7% from 1.8%.
Tesco shares were down 1.0% at 248.00 pence early Tuesday in London. Sainsbury's shares were down 0.5% at 265.20p. Ocado was down 0.8% at 789.60p.
M&S was up 8.5% at 222.17p, having separately said on Tuesday it now expects profit growth in its full financial year and interim results to show "significant" improvement over previous expectations.
By Tom Waite, Alliance News editor
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