Tesco’s decision to ditch its Brand Guarantee scheme last week coincides with new data showing it has overseen price rises at a faster rate than its rivals every month for an entire year.
The supermarket has pledged to plough investment into everyday low prices when it scraps its Brand Guarantee later this month and claims it has already cut prices on 260 products by between 10% and 50%.
However, these targeted price cuts are yet to affect its average pricing across its range. The Grocer Price Index has found Tesco’s level of annual price inflation was once more significantly higher than the rest of the big four.
The overall GPI, collated by Brand View from over 60,000 SKUs across the big four, edged back down to 1% in the month to 1 July from 1.1% in the previous period. The overall level has remained between 0.8% and 1.2% since the month to 1 April, having fallen back from over 2% in the month to 1 March.
The gap between Tesco and the overall GPI figure had reduced last month to 1.2ppts but rose back to 1.6ppts in the month of 1 July as its overall inflation rose from 2.3% to 2.6%.
Tesco has returned the highest level of annual inflation every month since the month to 1 August 2017.
However, this month marks the last comparative period before its inflation began to spike – from 1.2% to 3.4% in a single month in August 2017.
The annualisation of this inflationary jump is likely to see Tesco’s level of annual inflation fall more into line with the rest of the industry over the coming months. It had already reduced from a peak of 4.1% in the month to 1 March to a 10-month low of 2.3% last month.
Meanwhile, Sainsbury’s dipped back into year-on-year deflation of –0.1%, the third time in four months its prices have fallen on an annual basis.
Asda posted its lowest level of annual inflation since the month to 1 January 2017 as it recorded annual inflation of just 0.2% driven by a 5% reduction in fruit & veg prices year on year.
Waitrose, not in the official GPI calculation, recorded a 0.3% drop in annual prices – its biggest annual price drop since November 2016.
However, in a mixed picture, Morrisons posted its highest inflation in five months of 0.9% as its soft drinks prices jumped 4.6% year on year.
Four categories were in deflation this month, alcoholic drinks (–0.4%), baby goods (–0.3%) fruit & veg (–0.2%) and dry grocery (–0.1%).
This marks the first time that many categories showed falling prices year on year since the corresponding period in 2017.
The overall GPI figure is still being inflated by a post-sugar levy jump in the price of soft drinks, up 3.3% year on year from inflation of 2.9% last month. Other category rises included frozen (2.8%), biscuits, confectionery & snacks (3.5%) and bakery (2.7%).
Month on month supermarket priced edged down 0.2%, led by a significant monthly movement in dairy prices, which fell 3.6%.