British grocery inflation slowed to 3.0% in the four weeks to June 14, researcher Worldpanel by Numerator said on Tuesday, easing concerns about the impact of the Middle East conflict filtering through to supermarket shelves.
Grocery inflation was 3.1% in last month's report and 3.8% in the one before that.
The Worldpanel data is the most up-to-date snapshot of UK consumer behaviour, providing an early indication of food pricing pressures in June ahead of official data on July 22.
GROCERY SALES VOLUMES LOWER
The data showed UK grocery sales increased 2.4% over the four weeks year-on-year, indicating shoppers bought fewer goods after inflation is taken into account, despite a boost to sales of summer staples, such as sun care products and beef burgers, from a ten-day heatwave.
Worldpanel said prices were rising fastest in products such as fresh fish and skin care, and falling fastest in butter and spreads and soft drinks.
Last week industry leader Tesco (TSCO.L) said that so far Iran war-driven inflation "hasn't materialised as an issue" and reiterated that it did not recognise a Food and Drink Federation warning that food prices will be rising by almost 10% by December.
Tesco said its own rate of food inflation was running below the official rate for May of 2.2%.
However, lobby group the British Retail Consortium, which represents the major grocers, does expect food inflation to pick up over the coming months, reflecting the rise in input costs as a result of the conflict.
Worldpanel said shoppers continued to lean on grocers' promotions to keep their bills down, with 30.4% of all sales on some form of deal.
Worldpanel said that over the 12 weeks to June 14, Tesco's sales growth slowed to 1.2% and its market share edged down by 10 basis points. Sales at number two player Sainsbury's (SBRY.L) rose 2.0%, with its market share edging up 10 basis points.
Discounter Lidl GB remained the fastest growing bricks-and-mortar grocer in the researcher's data set, with sales up 8.6%, while online supermarket Ocado (OCDO.L) remained the fastest growing overall, with a 13.5% increase.
Number three player Asda continued to lose market share.
UK supermarkets' market share and sales growth (%)
Source: Worldpanel by Numerator
