British grocery inflation jumps to 5.2 per cent in four weeks

Gulf Today

5 days ago

British grocery price inflation rose to 5.2 per cent for the four weeks to July 13, its highest level since January last year, according to data from market researcher Worldpanel by Numerator, adding to pressure on low-income households.
The figure is up from 4.7 per cent in last month's report. Britain is struggling with persistently high inflation, as supermarkets face rising staff wages, new employer taxes and regulatory costs, even as commodity prices climb.
Worldpanel by Numerator, which formerly published the data under the name Kantar Worldpanel, said just under two-thirds of households say they are 'very concerned' about the cost of their groceries, and are switching to supermarket own-label products. Inflation in Britain is the highest of any major advanced economy and is around one percentage point more than in the United States or the Eurozone. Grocery sales in value terms grew 5.4% year-on-year over the four weeks, helped by warm weather which boosted ice cream and sorbet sales by 33%, while sales of iced coffee and strawberries also jumped. Sales at Tesco, the country's biggest supermarket, increased by 7.1% in the 12 weeks to July 13 compared to the same period last year, extending its market share to 28.3%, while No.2 player Sainsbury's sales gained 5.3%. No.3 grocer Asda remained the industry laggard with a sales decline of 3%, outshone by online specialist Ocado and discounters Lidl and Aldi, which showed sales growth of 11.7%, 11.1% and 6.3% respectively in the period.
British consumer sentiment had a marked fall for the first time in nearly three years last month, reflecting increased worries about job security, a Deloitte survey showed on Monday.
Deloitte said its consumer confidence index dropped by 2.6 percentage points to 10.4% in the second quarter, its lowest since the first quarter of 2024.
The fall was the first since the third quarter of 2022 - when inflation hit a double-digit peak and financial markets reeled from former Prime Minister Liz Truss' budget plans - apart from a 0.2 point decline last year which Deloitte did not view as statistically significant.
'Concerns of a slowing labour market have left consumers worried about job security and income growth prospects, while persistent inflation and a high cost of living have negatively impacted sentiment towards personal debt,' said Deloitte consumer insight lead Celine Fenech.
Businesses have blamed increased employment taxes and a higher minimum wage which took effect in April, as well as planned law changes to make it harder to dismiss new employees, for making them more reluctant to hire.
Official data last week showed Britain's unemployment rate rose to 4.7% in the three months to May, its highest since 2021, while inflation picked up to 3.6% in June, the highest since January 2024.
The Deloitte figures paint a slightly different picture to Britain's longest-running survey of consumer sentiment, from GfK, which drifted in the second half of last year but rose to its highest since December last month.
Deloitte's survey of 3,200 consumers was conducted between June 13 and June 16 and the consumer sentiment index is based on six questions about job security, job opportunities, income, debt, children's welfare, and general health and wellbeing.
Meanwhile British pay growth slowed in May and employee numbers dropped further last month, but the cooling in the labour market which had alarmed some policymakers appeared less acute than previous data had suggested, official figures showed on Thursday.
Annual wage growth, excluding bonuses, slowed to its lowest since the second quarter of 2022 in the three months to May at 5.0 per cent. But the figure was still slightly higher than the 4.9 per cent median forecast from economists in a Reuters poll and April's pay growth was revised up to 5.3 per cent from 5.2 per cent.
The number of employees on company payrolls dropped by a provisional 41,000 in June after a 25,000 decline in May.
However, the May decline was far less sharp than the originally reported reading of 109,000, which represented the biggest decline since early in the COVID-19 pandemic and had triggered concern that businesses were retrenching rapidly in the face of higher labour costs and a weak growth outlook.
'The latest figures ease immediate pressure on the Bank of England to accelerate interest rate cuts. Though the labour market continues to soften, the hefty revision to May's payrolled employees figure paints a less alarming picture than previously,' said Jack Kennedy, senior economist at recruitment site Indeed. Five-year British government bond yields rose to a one-month high after the data and financial market expectations for an August rate cut softened marginally.
The ONS said May's initial estimate of the fall in payroll numbers had been more provisional than usual due to an earlier-than-usual publication date for the labour market data last month.
Reuters