In a world where instability and inflation seem intertwined, recent data offers a glimmer of hope. Grocery price inflation, a critical indicator of market health, has witnessed a consecutive decline for the seventh month, landing at 11% for the month ending 1st October. This marks the lowest rate since June of the previous year1.
What’s driving this change? For starters, data from analytics powerhouse Kantar reveals a notable drop in the price of staples. The average cost for a 250g pack of butter, for instance, plummeted by 16 pence year-on-year2.
Retail strategies too are evolving. Supermarkets are reviving promotional offers, aiming to strike a balance between quality and affordability. Remarkably, a whopping 26.5% of grocery sales in the recent quarter were driven by promotions – the highest since June 20223.
The market dynamics are interesting. Tesco, a dominant player, has been at the forefront of this promotional wave. Their sales surged by 9.2% over the past 12 weeks. Brand-focused promotions also saw a resurgence, narrowing the gap with own-label products4.
Shifting gears, September’s unusually warm weather played its part. Sales of summer staples like ice cream and burgers soared. On the flip side, early holiday shopping took a hit, with items like Christmas puddings seeing reduced demand5.
Lidl and Aldi, known for their competitive pricing, witnessed robust growth, with Lidl emerging as the fastest-growing retailer this month6. Meanwhile, reports suggest a potential collaboration between Waitrose and Amazon, a move that could reshape online grocery shopping7.
In conclusion, the retail industry is in flux. While inflation concerns loom, supermarkets are innovating, providing consumers with both value and choice.
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