Grocery inflation falls to 2.1% — lowest in three years
UK grocery price inflation slowed to 2.1% in the four weeks to early June, according to Kantar, marking the lowest reading since the summer of 2023 and bringing the cost of a typical weekly shop close to its pre-energy-shock trajectory.
The slowdown is driven by a familiar mix of factors: lower input costs feeding through to wholesalers, a renewed price war between the discounters and the "big four" supermarkets, and an aggressive expansion of own-label ranges in categories from frozen food to chilled meals.
Aldi and Lidl together added 0.6 percentage points of market share over the period, with Tesco and Sainsbury's holding their ground by matching key discounter prices on a widening list of essentials. Asda's turnaround plan continued to bear fruit, while Morrisons saw the largest year-on-year sales improvement of any of the established grocers.
What's getting cheaper
- Sunflower oil: down 11% year-on-year
- Dried pasta: down 7%
- Own-label bread: down 5%
- Butter (UK-produced): down 3%
- Fresh chicken breast: down 2%
What's still rising
- Olive oil: up 14% year-on-year, with continued pressure on Mediterranean harvests
- Cocoa-based confectionery: up 9%
- Branded soft drinks: up 5%
- Fresh fish: up 4%
Wider picture
Falling food inflation has been one of the most important drivers of the broader fall in headline CPI over the past nine months. With energy bills also lower than a year ago, the Office for National Statistics is now expected to confirm overall CPI at or just below the Bank of England's 2% target when it publishes the next figures.
For households, the impact is starting to show up in disposable income. Real wage growth has been positive for fourteen consecutive months. Charities working with low-income families caution, however, that the picture remains uneven: rents, council tax and certain utility standing charges are still rising at well above the rate of earnings, leaving the poorest households with less of the headline benefit.
