UK Grocery Inflation Steady as Shoppers Seek Out Promotions

Grocery inflation in the UK remained unchanged in February, helped by increased reliance on supermarket promotions amid rising cost-of-living concerns, according to a report released Tuesday by market researcher Kantar, as reported by Reuters.

Supermarkets have warned that tax increases and a national minimum wage hike will fuel inflation this year. Britain's overall inflation rate hit a 10-month high in January, and the Bank of England forecasts it will climb further. The Institute of Grocery Distribution has predicted food inflation could reach nearly 5% this year.

Kantar's report revealed that annual grocery price inflation remained at 3.3% in the four weeks ending February 23, matching last month's figure. However, sales rose 3.6% year-on-year.

The report highlighted a growing trend of shoppers seeking out promotional items. Products purchased on special offer accounted for 27.6% of sales, up 0.3 percentage points from the previous year, indicating the increasing popularity of promotional strategies like Tesco's "Club Card price" and similar deals.

Earlier on Tuesday, the British Retail Consortium (BRC) reported that food inflation rose to 2.1% in February, its highest level since September 2022. This increase reflects higher prices for items such as butter, cheese, eggs, bread, and cereals.