(Alliance News) - The rate of grocery price inflation in the UK has dropped for the second time in a row, the latest market survey from Kantar revealed on Wednesday.

In the 12 weeks to December 25, take-home grocery sales increased by 7.6% annually to GBP34.10 billion. In the four weeks to Christmas Day, they rose 9.6% on-year, the fastest rate of growth since February 2021.

Grocery sales in December reached GBP12.8 billion, the first time that the GBP12 billion mark has been breached.

The grocery price inflation rate faded to 14.4% in December, from 14.2%, "the second time in a row the rate has dropped".

"Monthly grocery sales were a whopping GBP1.1 billion higher in December versus last year, breaching the GBP12 billion mark for the first time. Value sales are up significantly but grocery price inflation is the real driving factor behind this rather than increased purchasing," Kantar analyst Fraser McKevitt said.

Value sales for mince pies soared by 19%, but volume purchased barely increased, while Christmas puddings only increased 6% in volume terms compared with 16% in value. The prices of milk, dog food and frozen potato products are rising fastest, Kantar said.

Kantar's data is based on over 75,000 identical products compared year-on-year in the proportions purchased by British shoppers. It is a 'pure' inflation measure in that shopping behaviour is held constant between the two comparison periods.

Aside from Christmas, Kantar also noted that the FIFA men's World Cup boosted sales in the take-home beer market.

"England's quarter-final match against France on 10 December saw sales hit their biggest daily takings of the year, surpassed only by the Friday and Saturday before Christmas as people stocked up on festive drinks," McKevitt added.

"Shoppers took to the supermarkets in their droves in the immediate run-up to the big day, but this was also evident throughout the month of December, as people visited physical grocery stores 5.2% more often than this time last year. In fact, December was stores’ busiest month since the start of the pandemic."

Among listed supermarkets, Tesco PLC sales grew by 6.0% in the 12 weeks to Christmas Day, but its market share dropped to 27.5% from 27.9%. J Sainsbury PLC saw sales growth of 6.2%, though its market share fell to 15.5% from 15.7%.

Online grocer Ocado Group PLC maintained its market share of 1.7%, with sales rising 8.2%.

Elsewhere, Asda sales rose 6.4%, but its market share fell to 14% from 14.2% a year ago. Wm Morrison Supermarkets saw its best performance since June 2021, despite sales falling by 2.9%. Its share of the market fell to 9.1% from 10.1%.

Together with Sainsbury's and Tesco, Asda and Morrisons make up the traditional 'big four' of UK grocers.

German discount grocers continued to claim ground. Aldi remains the fastest growing grocer, with 27% sales growth, taking its market share to 9.1%, up from 7.7% a year ago. Lidl saw sales increase by 24%, with its market share rising to 7.2% from 6.3% the year prior.

Aldi enjoyed record UK sales during the Christmas trading period, it announced Tuesday, as the country struggles with soaring prices.

Sales during December topped GBP1.4 billion, up more than 26% from a year earlier, with the company profiting also from food and drink purchases during the football World Cup, according to a statement.

Tesco shares were trading up 1.4% at 232.24 pence in London on Tuesday morning. Sainsbury was up 1.6% at 228.40p. Ocado was up 5.2% at 682.60p.

By Harvey Dorset, Alliance News reporter

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