Grocery inflation hits four-year high ahead of Christmas

Consumers are facing pressure from rising food prices in the lead-up to Christmas as grocery inflation hit another four-year high, figures show.

Like-for-like grocery inflation is now 3.6%, topping last month's 3.4% to reach its highest level since 2013, according to quarterly data from Kantar Worldpanel.

Growth in supermarket sales lagged slightly behind the rate of inflation, rising 3.1% year on year over the past three months to December 3, while online grocery sales growth slowed to 2.8%.

Despite the higher costs, shoppers are still expected to splash out on the Friday and Saturday before Christmas - December 22 and 23 - and part with £1.5 billion.

Alcohol sales are already up by nearly £172 million compared with this time last year, due primarily to consumers choosing more expensive festive tipples like gin, whisky and sparkling wine.

Aldi reclaimed its crown as Britain's fastest-growing grocer during the latest quarter, with sales up 15.1% year on year.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: "With Christmas just around the corner, prices are still rising.

"Despite higher prices, the British public is well into the swing of festive shopping. Alcohol sales are up by nearly £172 million compared to this time last year and, while volume sales have increased, this impressive growth is mainly a result of consumers choosing more expensive festive tipples."

He added: "Christmas Day falls on a Monday this year. Last time that happened, in 2006, the Friday before was the most popular day for grocery shopping that year.

"If we see a similar pattern in 2017, Friday 22 December is likely to win out as the grocers enjoy not only the biggest shopping day of 2017, but the most successful ever recorded."

Analysts Nielsen predict a record £4.2 billion will be rung through the tills of the UK's leading supermarkets in the week before Christmas Day, according to its latest figures.

Just one-third of shoppers are expected to spend less on Christmas food and drink than last year, with the £4.2 billion representing 3.6% more than the corresponding week last year and 50% more than a typical week in the year.

Mike Watkins, Nielsen's UK head of retailer insight, said: "With Christmas Day falling on a Monday, people are likely to delay their big Christmas shop until the final week and we expect nearly all shoppers will visit a grocery retailer at least twice that week.

"There'll be a particular surge between Thursday 21 and Saturday 23 - when over half of shoppers are likely to be shopping for the second time that week - with one in five shoppers indicating Friday will be the preferred day, allowing the weekend to be spent with friends and family."

Nielsen's data shows Tesco had the most improved performance among the Big Four over the last 12 weeks, with sales up 3.4% year on year, followed by Sainsbury's at 1.9%.

Outside of the discounters, Marks & Spencer had the best sales growth figures at 4.6% up year on year.

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