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UK grocery prices jump 2.3 percent in 12 weeks to March 26
April 4, 2017 / 7:19 AM / 7 months ago

UK grocery prices jump 2.3 percent in 12 weeks to March 26

LONDON (Reuters) - British grocery prices jumped 2.3 percent year-on-year in the 12 weeks to March 26, as the plunge in the pound following last year’s Brexit vote forced higher the cost of staples including butter, fish, tea and skincare.

FILE PHOTO: A woman shops at a Sainsbury's store in London, Britain December 3, 2015. REUTERS/Neil Hall

Market researcher Kantar Worldpanel said the latest increase was up from the 1.4 percent rise recorded in the 12 weeks to Feb. 26.

Food prices started to edge up in Britain in the final three months of 2016, ending more than two years of falling costs.

“Inflation shows no signs of abating,” said Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel.

Rising prices cost the average household an additional 21.31 pounds ($26.52) during the past 12 weeks, McKevitt said.

“We expect inflation to continue to accelerate, and as a result we’re likely to see consumers looking for cheaper alternatives.”

Britain’s vote last June to leave the European Union caused the pound to slide, pushing up the price of imports, while prices of certain key commodities have also risen.

The British Retail Consortium has said shoppers are cutting back non-essential spending to counter higher food costs, showing the pressures starting to build on consumers who helped the economy withstand the Brexit shock in the initial months.

Kantar data also showed most of the big supermarkets struggling in the period, as Easter falls later this year and outside the latest 12-week timeframe.

Sales at market leader Tesco (TSCO.L) were down 0.4 percent, Sainsbury’s (SBRY.L) fell by 0.7 percent, Asda (WMT.N) dropped 1.8 percent and Morrisons (MRW.L) edged 0.3 percent higher.

Discount retailers Aldi and Lidl reached record-high market shares, with Lidl the fastest-growing retailer on a 15 percent sales boost and Aldi increasing sales by 14.3 percent. Overall, the grocer market increased by 1.4 percent.

($1 = 0.8037 pounds)

Reporting by Kate Holton; Editing by David Clarke and Dale Hudson

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