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UK: Britons flock to Discount Grocers as Food Inflation persists

Kantar Research shows that Discount grocers are winning over more British shoppers as a tenth month of double-digit food-price inflation cuts into household budgets.

German discounter Lidl was the fastest-growing grocer, with sales increasing 25.1%, market research group Kantar said on Tuesday. Aldi was close behind, increasing its market share to more than 10% for the first time.

UK inflation has remained stubbornly high as consumers saw the sharpest jump in food prices in four decades last month. Retailers are fighting to attract cash-strapped shoppers scouting for the best deals as they visit multiple major stores every month and turn to own-label products.

Shop-price inflation dipped slightly to 17.3% in the four weeks to April 16, Kantar said.

“The latest drop in grocery price inflation will be welcome news for shoppers but it’s too early to call the top,” said Fraser McKevitt, head of retail and consumer insight at Kantar.

April saw record Easter shopping despite elevated prices. Grocers sold 5 million more Easter eggs and treats than last year, and hot bun sales were up 5%. Brits spent around £14 ($17.5) on chocolate in April, the equivalent of six packs.

Pricey Milk

Eggs, milk and cheese are seeing the fastest price gains, Kantar said. Shoppers are relying on supermarket own-label lines with sales up 13.5%. Consumers are now after the cheapest of the cheapest products, with the best value non-branded products sales increasing 46% from a year ago.

Earlier this month all the main grocers cut the price of milk, as they pass on some deflation to consumers. The price of a pint of milk has fallen to 90 pence from 95 pence and two pints have been cut to £1.25 from £1.30.

Tesco said it has seen cost price deflation in milk, while Asda said it took “swift action” as “commodity prices have eased.”


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