Prices Rise at Fastest Pace Since February 2023
British grocery inflation accelerated to 4.1% in the four weeks to May 18, marking its highest level in over a year, according to new data from Kantar. The increase—up from 3.8% last month—reflects rising costs from higher payroll taxes and April’s minimum wage hike, adding strain to households already grappling with elevated bills.
The Institute of Grocery Distribution warns food inflation could near 5% this year, exacerbating the cost-of-living crunch. Meanwhile, grocery sales grew 4.4% year-on-year as shoppers adjusted spending habits.
Shoppers Feel the Pinch as Inflation Bites
“Once inflation crosses the 3%-4% threshold, consumers really start noticing the hit to their wallets,” said Fraser McKevitt, Kantar’s head of retail insight. The steepest price jumps were seen in chocolate, sunscreen, and butter, while pet food and paper products saw the sharpest declines.
Retailers Show Mixed Performance
- Tesco led with 5.9% sales growth over 12 weeks, maintaining its market dominance.
- Sainsbury’s followed with a 4.7% rise.
- Asda lagged with a 3.2% drop but posted its best performance since May 2023.
- Discount chains Aldi and Lidl surged 8.4% collectively, their strongest growth since January.
- Ocado remained the fastest-growing grocer for 12 straight months, with sales up 14.9%.
- Marks & Spencer defied a recent cyberattack with a 12.3% sales boost.
Outlook: More Pain Ahead?
With wage pressures and supply chain costs persisting, analysts warn grocery inflation may climb further, forcing Britons to make tougher budget choices in the months ahead.
