In a welcome relief for UK consumers, British food retailers Ocado Retail and Sainsbury’s are making moves to ease the pressure on wallets by reducing prices. This signals a continuing downward trend in UK food price inflation, offering some respite amid ongoing cost-of-living concerns.
Ocado Retail, the joint venture between Ocado Group and Marks & Spencer, has announced a significant drop in prices for around 200 items, averaging an 8% reduction. On the other hand, Sainsbury’s, the second largest grocer in the UK, has expanded its price-matching scheme with Aldi, adding over 40 products to the list, totaling more than 400 items.
The focus on grocery prices comes as British households grapple with persistent inflation, which reached its highest level since 1977 at over 19% in March. Although official measures have shown a slight slowdown to 14.9% in July and around 12.7% in August, rising food costs continue to impact many households’ financial stability.
These moves are being closely monitored by various stakeholders, including consumers, policymakers, and the Bank of England, as the central bank contemplates potential interest rate increases. Despite recent reductions in prices by major supermarkets like Tesco, the Institute of Grocery Distribution predicts that UK food price inflation could still hover around 9% by December.
Ocado Retail’s latest price cuts include examples like a four-can pack of Heinz beans, now priced at £3.75 instead of £4, and a pack of Quaker rolled porridge oats reduced to £1.50 from £1.75. Similarly, Sainsbury’s has aligned its own brand sweetcorn’s price with Aldi’s at 65 pence per 325g tin, previously priced at 95 pence.
While these price reductions are welcome news, retailers caution that ongoing supply chain challenges, along with issues like poor UK harvests, might lead to increased input costs in the coming months. This situation echoes the broader trend of high inflation that many European governments are grappling with.