A drop in grocery price inflation is leading to improved consumer sentiment, according to research from Kantar.
The rate now stands at 2.1%, marking the sixteenth consecutive month that it has fallen. 36% of households described their financial position as comfortable in May 2024, a proportion not surpassed since November 2021
Fraser McKevitt, the head of retail and consumer insight at Kantar, said: "The cost-of-living crisis isn’t over – far from it. 22% of households say they’re struggling, meaning that they aren’t able to cover their expenses or are just making ends meet.
"However, there are positive signs that many of us no longer feel the need to restrict our spending quite so much, with lower inflation helping to ease the pressure on people’s pockets. In May, we recorded the largest jump in the number of comfortable households since January 2023, rising by two percentage points on February 2024’s figure. Costs are falling in nearly one third of the grocery categories we track, including toilet tissues, butter and milk. That’s a big increase from last year, when just 1% of markets were declining.
"With the men’s UEFA European Football Championship underway, the supermarkets will be waiting to see if positive performances by England and Scotland can deliver a win at the tills too. The grocers are looking to entice in consumers enjoying this year’s tournament, with the proportion of beer and lager sales on promotion leaping up to over 40% in the latest four weeks. Retailers will be competing with fans heading out of the house to watch the football as well as with each other. Pubs especially could benefit from a boost – whether or not football comes home. Throughout the last tournament held in 2021, sales of food and non-alcoholic drinks in pubs soared by 60% compared with the average month that year."