Grocery price inflation has dropped to a new two-year low but almost a quarter of British households say they are still struggling financially, according to the latest figures.
Supermarket prices were 4.5 percent higher than a year ago in March, marking the lowest inflation rate since February 2022 and a significant drop from last month’s 5.3 percent, according to analysts Kantar.
Despite the ongoing slowdown, a survey by Kantar Worldpanel at the end of January found that 23 percent of British households still identify themselves as struggling financially.
This proportion remains unchanged from November last year, with more than 10,700 people surveyed.
Among those experiencing the most financial pressure, 78 percent are opting for cheaper groceries, while 68 percent are utilising promotions to manage their budgets.
This has resulted in £605million more spent on deals this month compared to March last year.
Among those feeling the most pressured, 78 percent are actively buying cheaper groceries while 68 percent are using promotions to help manage budgets, with £605million more spent on deals this month than in March last year.
Sales of branded goods pushed ahead of own label products in March. However, premium own-label lines grew by a staggering16.1 percent this month – the quickest rate seen by Kantar in almost three years.
Fraser McKevitt, head of retail and consumer insight at Kantar, said: “Grocery inflation has come down significantly since hitting an eye-watering peak of 17 percent in March 2023.
“However, despite this continued slowdown, many British households are still feeling the squeeze.”
Despite financial concerns, consumers have increased their spending on Easter treats by £88million in the first three months of this year compared to last year.
Volume sales of hot cross buns have also risen by 15 percent, despite Easter occurring 10 days earlier this year than last year.
Take-home grocery sales in general overall rose by 4.6 percent over the four weeks to March 17.
Mr McKevitt said: “With Easter on the horizon, consumers have been stocking up on classic seasonal treats, with a quarter of people picking up four or more items when buying chocolate eggs.
“This rises to 29 percent for shoppers aged over 65, suggesting that many grandparents are planning to indulge their families this weekend.”
Ocado was the fastest growing retailer in March, improving sales by 9.5 percent in the last 12 weeks, well ahead of the total online market which rose by 6.6 percent.
Year-on-year sales at Tesco and Sainsbury’s climbed by 5.8 percent and 6.7% percent respectively, taking them to market shares of 27.3 percent and 15.2 percent respectively.
