JSAIY J Sainsbury Plc (QX)

By Michael Susin

U.K. grocery-price inflation fell for the sixth month in a row, reaching its lowest level in more than a year, market-research firm Kantar said in its latest report on Tuesday.

Annual grocery inflation for the four-week period to Sept. 3 dropped to 12.2% from 12.7% in August, further moving away from the record high of 17.5% in March, it said.

Despite the fall, the Kantar report showed that 95% of consumers continued to be worried about the impact of rising grocery prices, matched only by their concern about energy bills.

The inflationary backdrop continues to benefit discount retailers as consumers seek for bargains, with German Aldi becoming the fourth-largest supermarket in Britain and, alongside with Lidl, making one of the biggest market-share gains over the past 12 months.

Aldi sales rose 17.1% in August, while Lidl sales increase by 16.0%. Together, they currently capture 17.7% of the sector.

The increase is mainly driven by a boost in own-label sales, which currently represent more than half of everything consumers buy.

"We expect this performance to continue as inflation remains stubbornly high, however, growth rates for both the discounters have been slowing in recent months as they annualize against rapid rises last year," Kantar head of retail and consumer insight Fraser McKevitt said.

Among the traditional retailers, Tesco and Sainsbury's were the fastest growers, with sales increasing by 9.3% and 9.1% respectively. Tesco's market share currently stands at 27.2% and Sainsbury's at 14.8%.

Write to Michael Susin at michael.susin@wsj.com

(END) Dow Jones Newswires

September 12, 2023 06:25 ET (10:25 GMT)

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