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Newsflash: UK grocery inflation has fallen for the 16th month in a row. Data firm Kantar reports that supermarket prices are 2.1% higher than a year ago this month, a slowdown on the 2.4% annual rise recorded in early May.
Kantar reports that prices are now falling in nearly one-third of the grocery categories it tracks, such as toilet tissues, butter and milk. This slowdown in price rises should bring some relief to households, who were hit by grocery inflation of 17% in March 2023.
But Fraser McKevitt, head of retail and consumer insight at Kantar, warns that the squeeze on budgets isn’t over. “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.”
Kantar’s grocery inflation data will tee up tomorrow’s official UK inflation measure – due at 7am on Wednesday. City economists predict the UK consumer prices index could slow to 2%. That would mean inflation would, finally, be back to the Bank of England’s 2% target, for the first time since July 2021.
The hotel sector can be a good gauge of economic confidence, tracking whether people are splashing out for trips away and if firms are stumping up for business trips. And this morning, Premier Inn owner Whitbread has reported that recent trading in the UK has been “more encouraging”, as it prepares to face union anger over plans to cut 1,500 jobs.
The company says it remains “confident in the full year outlook”. In its latest financial results, Whitbread reports that sales growth was flat (0%) in the UK for the 13 weeks to 30 May 2024, although it did grow by 15% in Germany (where trading had been weaker). That 0% figure, though, hides a pick-up after a weak start to the first quarter of Whitbread’s financial year.
Whitbread reports that midweek business demand and peak leisure demand both remain “robust”, but last-minute demand for weekend stays has been “slightly softer”, particularly in London.
The company, and its shareholders, will feel the wrath of the Unite union later today when they gather for its AGM at its offices in Dunstable, Bedfordshire. Unite are planning a protest over plans, announced in April, to cut 1,500 jobs. The union says Whitbread have refused to consult with them, or answer basic questions on the redundancy process.
Whitbread also owns several restaurant chains, including Beefeater, Brewers Fayre and Bar + Block. It reports today that its total food and beverage sales (which fell 1% year-on-year) were boosted by strong breakfast sales driven by high occupancy at its hotels. However, that was offset by softer trading in “a number of our branded restaurants”, Whitbread says (a sign that cash-strapped customers are cutting back on eating out, perhaps?).
The agenda
• 8am BST: Kantar’s grocery price inflation
• 10am BST: Eurozone inflation rate for May (final estimate)
• 10am BST: ZEW index of German economic sentiment
• 1pm BST: Unite protest ahead of Whitbread’s AGM
• 1.30pm BST: US retail sales for May
• 2.30pm BST: Whitbread’s AGM begins
We’ll be tracking all the main events throughout the day ... |
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