Food inflation bellow 2% in UK, competition grows

The June figure of 1,7% food inflation was also well below the Bank of England’s 3.6% forecast for the month, and far short of the over 9% increase that had been anticipated by the Food and Drink Federation (FDF) for December. The UK food industry warned earlier this year that higher energy costs linked to the conflict in Iran could drive food price inflation up to 10% by Christmas. 

Retail competition the first factor

The UK’s highly competitive grocery market appears to be one of the strongest forces restraining food inflation. That competition is evident across the market, from the mainstream supermarkets to the discounters. Recent market-share data illustrates the pressure. 

Tesco still leads but shrinks

Worldpanel by Numerator data indicates that Tesco’s market share dipped in June and July. Tesco still leads the UK grocery market with 28,7% market share, followed by Sainsbury’s 16,3%, Asda 11,4%, Aldi 10,1%, according to Kantar’s post recent published data. Pictures: FPC

For more information about UK grocery trends with fresh produce, you can click here.