Retail food price rise increases industry confidence

Food prices have risen for the first time in more than two years, according to grocery market analysts Kantar Worldpanel.

Fraser McKevitt, head of retail and consumer insight, said after 28 months of deflation in the market, like-for-like grocery prices increased by 0.2% during the later quarter of 2016 to bring a return to food price inflation.

“Last year retailers focused on simplifying their discounts and offers, and the level of promotional sales has fallen to 37% as a result – the lowest level over Christmas since 2009,” he said.

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Supermarkets also saw record sales over the festive period, with shoppers spending £480m more at the tills than in 2015.

The big four supermarkets together accounted for 71.4% of market share, with a sales increase of 0.1% – the first time all four have collectively grown since June 2014.

Ruth Mason, NFU food chain adviser, said: “These figures will certainly add to increased farmer confidence that we have seen and come after a year of huge challenges to the British farming industry.”

But she added: “Inflation is a significant challenge for the retail sector, with shoppers becoming used to maximum value.

“We wish to see retailers continue to build robust and transparent supply chains that communicate to farmers what shoppers expectations are.”