TOP NEWS: UK food inflation edges higher for first time in 17 months

(Alliance News) - UK grocery inflation accelerated for the first time since March last year, figures on Tuesday showed.

Supermarket prices were 1.8% higher than a year ago in the four weeks to 4 August, picking up pace from 1.6% in July, according to retail analysts Kantar.

This re-acceleration comes after 17 months of easing inflation from a peak of 17.5% to its lowest point since September 2021 last month.

Kantar's Head of Retail & Consumer Insight Fraser McKevitt said: "Having reached its lowest rate in almost three years in July, August saw inflation nudge up again slightly. While this is noticeable following 17 straight months of falling rates, it actually marks a return to the average levels seen in the five years before the start of the cost of living crisis."

The report painted a mixed picture on supermarket shelves with prices rising across 182 product categories, as the costs in 89 others fall.

McKevitt noted the start of the Olympics saw sales of snacks such as nuts increase by 60% and crisps by 10% on the Friday of the opening ceremony in Paris, compared with the previous week.

The warm weather saw shoppers celebrate with sales of burgers, up 32% compared with the same time last year, chilled prepared salad, sales up 22%, and ice cream, sales up 23%.

Kantar said take-home sales at the grocers rose 2.3% to GBP33.72 billion in the 12 weeks to August 4 compared with GBP32.96 billion a year ago.

J Sainsbury PLC's market share rose by 0.5 percentage point in the recent period, compared to the same period last year – its largest year-on-year share gain since July 1997 - and giving a share of 15.3%, improved from 14.8%. Sainsbury's also was the fastest growing of the traditional supermarkets, with sales increasing by 5.2% to GBP5.15 billion from GBP4.89 billion.

Britain's largest grocer, Tesco PLC, maintained its streak of winning share every month since August 2023. Its hold of the market climbed by 0.6 percentage point to 27.6%, while its sales jumped by 4.9% to GBP9.32 billion from GBP8.89 billion.

By contrast, Asda's market share is now 12.6%, down from 13.7% a year ago, while Morrisons' stake stands at 8.6% compared with 8.7%.

Discounters Lidl and Aldi both saw sales growth. Buoyed by a 7.8% boost in sales to GBP2.73 billion from GBP2.53 billion. Lidl won an extra 0.4 percentage point of the market, taking its share to 8.1% from 7.7%.

Aldi's sales rose by 0.5% to GBP3.36 billion from GBP3.35 billion with its market share now 10.0% compared with 10.2% a year ago.

Sales rose by 11% at online-only retailer Ocado to GBP622 million from GBP559 million, continuing its six-month run as the fastest growing grocer. Its share is up by 0.1 percentage point compared with last year, now standing at 1.8%.

Ocado Retail is a joint venture between Ocado Group PLC and Marks & Spencer Group PLC.

Waitrose's share increased by 0.1 percentage point to 4.5%. With sales also up by 4.5%, it logged its strongest growth since November 2023.

Frozen specialist Iceland now holds a 2.3% share, as shoppers there spent 4.1% more at its tills, while Co-op takes 5.9% of the market.

Shares in J Sainsbury rose 1.0% to 272.20 pence in London on Tuesday. Tesco rose 0.6% to 334.60p, Ocado rose 2.0% to 384.40p but Marks & Spencer fell 2.4% to 315.60p.

By Jeremy Cutler, Alliance News reporter

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