Grocery price inflation continues to edge higher - Worldpanel

(Sharecast News) - Grocery price inflation continued to edge upwards in October, industry research showed on Tuesday, as retail's critical golden quarter got underway. According to data from Worldpanel by Numerator, like-for-like grocery price inflation was 2.6% in the four weeks to 1 November, up from 2.5% in September and 2.3% a month prior to that.

Prices rose fastest in household lifestyle products, such as batteries, fresh fish and skin cleansing. The fastest falls were seen in butters and spreads, cheese, and chilled smoothies and juices.

Fraser McKevitt, head of retail and consumer insight at Worldpanel, said: "Grocery price inflation continued to increase after slowing over the summer. While prices are rising at a slower rate than at the beginning of the year, the direction of travel has changed. Household budgets have already taken a hit after the latest increase to the energy price cap arrived with the cold weather in October, and shoppers will be keeping a close eye on prices at the till this winter."

Grocery sales rose by 2.2% over the same period, with essentials spiking following the government's Be Ready public awareness campaign, which recommended households stock up on essentials in case of unexpected disruption to essential services. Hand sanitiser sales spiked 83%, bottled water 67% and tinned and jarred goods 37%.

Among individual retailers, online-only Ocado saw its sales jump 12.3% in the 12 weeks to November, giving it a new record market share of 2.3%. Marks & Spencer - which part owns the Ocado retail business - saw grocery sales through its stores jump 14.6% in the same period. M&S's sales are not included in the overall sales gauge, however, due to the retailer's higher mix of clothing and general merchandising in its offer.

Discounter Lidl also continued to fair well, with sales rising 6.6%, while Aldi ticked up 0.4%. But upmarket chain Waitrose also saw sales spark, rising 2.2%. Tesco, the UK's largest grocer with a 27.8% market share, saw sales improve 1.2% while closest rival J Sainsbury's added 0.8%.

At Asda, which recently appointed retail veteran David Potts chief executive, sales fell 0.5%.

McKevitt said: "Many households will be planning their Christmas spending more carefully this year, making Black Friday an important moment for shoppers looking to make their money go further on big-ticket items, while retailers will be hoping it gets the golden quarter off to a strong start."