Good news for shoppers as food inflation finally slows to its lowest level in a year

SHOPPERS finally had some good news yesterday as food inflation slowed to its lowest level in a year.

Grocery price inflation edged lower to 12.2 per cent in September, according to data analyst firm Kantar.

3

This is down from 12.7 per cent in August — and a big drop from the 17 per cent seen in the spring.

The price of food staples has soared since Russia invaded Ukraine in February 2022, pushing up the cost of fuel and fertiliser.

Pasta, bread, eggs, milk and cereals have all rocketed.

Big food companies — including Unilever, Nestle, Premier Foods and Associated British Foods (ABF) — have come under increased scrutiny as they hike prices well above the level of inflation to protect their large profit margins.

The Sun has previously revealed Premier Foods hiked the price of Bisto gravy by 76 per cent, Unilever doubled the cost of its Pot Noodles and ABF shrunk packs of Twinings tea by a fifth while raising prices.

ABF, which also owns the Kingsmill and Tilda rice brands, yesterday joined a growing chorus of food firms to say they wouldn’t be passing on price increases for the rest of the year now that inflation has eased.

Kantar data analysts say cash-strapped shoppers have now switched a whopping £3billion of spending from expensive food brands to supermarkets’ cheaper own-label products.

They claim more than half of food shopping is now on supermarket own brands, which has helped discounters Aldi and Lidl.

But while the German retailers have thrived during the cost-of-living crisis, Kantar’s latest figures show they have lost market share for the first time in months.

The traditional supermarkets are fighting back with increasingly more aggressive promotions.

Tesco and Sainsbury’s have launched an Aldi Price Match and lower prices for members.

And most of the major supermarkets have engaged in several rounds of price cuts to narrow the gap between themselves and Aldi and Lidl.

Fraser McKevitt at Kantar said he expected Aldi and Lidl’s sales to keep rising but to slow as they competed with their rivals’ new promotions.

The duo grew sales during the 12 weeks to September at double the rate of the major grocers.

£17B Home payment arrears

3

THE number of households behind on mortgage payments has jumped to the highest level since 2016, according to the Bank of England.

Fourteen interest rate rises by the Bank have led to a 13 per cent increase in mortgage arrears — up to £16.9billion in the second quarter of the year.

This equates to around 1 per cent of households being late with their mortgage payments.

Experts say the figure is this low because only a small number of home loans have been renewed in the past year due to the majority of households being on fixed mortgages.

Higher mortgage costs have also dampened demand. Many people now find it too expensive to buy a property.

Mortgage lending has slumped by a third, or £6.3billion, to the lowest level since the pandemic.

Households face a steep jump in mortgage costs as the average two-year fixed mortgage is now 6.7 per cent, compared to 2.3 per cent in 2021, according to Moneyfacts.

Rush for Wilko bargains

3

WILKO stores gained a quarter more shoppers in the last month as bargain-hunters flocked to closing-down sales.

Fresh figures from Kantar show three million shoppers passed through the collapsed chain’s doors, left, in August compared to 2.4million in July.

Kantar’s Fraser McKevitt said: “Shoppers have been making the most of Wilko’s closing sales, with its share of non-food groceries like toiletries, healthcare and household goods jumping from 1.8 per cent in July to 2.3 per cent in August.”

Administrators will ramp up discounts in coming days to clear stock in liquidation sales before shutting the stores forever.

Wilko’s value for money offers should have meant it thrived during the cost of living crisis.

But retail experts said it had lost ground to stronger rivals Poundland, B&M and Home Bargains.

The 93-year-old retailer’s balance sheet was weakened by family owners taking out £77million in dividends over the past decade.

Barclays jobs cut

BARCLAYS is axing 450 staff from its UK retail banking arm, which its boss said reflected a “generational shift”.

CEO CS Venkatakishnan said the cuts came after a wave of change across the industry.

He said: “What you see at Barclays is no different than what you see anywhere else.”

But Dominic Hook at Unite said: “How can Barclays slash 450 staff amid a cost-of-living crisis? It isn’t struggling to survive. This bank is making billions of pounds of profits.”

This post first appeared on thesun.co.uk