After last year’s record increase, food prices are finally rising to “more normal levels” as new figures show that inflation for supermarket goods is only 2.4 percent.

Figures from market research firm Kantar show that food price inflation for the four weeks to 12 May was at its lowest level since October 2021. The rate of price increases of 2.4% (down from 2.9% in the previous four-week period) is now less than a percentage point below the average pace of the ten years before the price rise began in 2021.

Fraser McKevitt, head of retail and consumer intelligence at Kantar, said: “Food retail inflation is gradually returning to what we would consider more normal levels.”

“When inflation is around 3%, we usually see significant changes in consumer behavior. When inflation rises above this level, shoppers buy cheaper items and when it falls, it’s the other way around. However, after nearly two and a half years of rapidly rising prices, it may take a little longer for shoppers to abandon the habits they have developed to cope with the cost of living crisis.

“Own brands, for example, are proving resilient and are still growing faster than branded goods, accounting for over half (52%) of total spending. Sales of premium own brands also continue to rise, up 9.9% year-on-year.”

While some items such as chilled fruit juices and chocolate are still seeing significant price increases, prices for dairy products such as butter and milk are falling.

But while prices have come back down to earth, the trend of discounters gaining ever larger market shares in the grocery trade continues. Lidl achieved a new record market share. An increase in bakery sales helped the company to a market share of 8.1 percent of grocery sales, while Aldi secured a market share of 10 percent.

Tesco continued to maintain a comfortable lead over second-placed Sainsbury’s as market leader. Ocado was again the fastest-growing grocer. Of the ten grocers tracked by Kantar, only Asda and Co-Op reported declines in sales.

McKevitt said the supermarket sector could see a boost this summer from major sporting events such as the European Championships. He said: “Major sporting events can have a big impact on grocery sales, particularly in categories such as alcohol. During England’s quarter-final match against France at the 2022 FIFA Men’s World Cup, takeaway beer sales reached their highest daily sales of the year outside of the Christmas period. Particularly when combined with warmer temperatures, this year’s summer of sport could give the sector a welcome boost.”

The slowing fall in food prices could bode well ahead of the “significant” inflation rate for April due to be released tomorrow. City economists predict the figures could show consumer price inflation falling to the Bank of England’s 2% target for the first time in three years.

However, this does not guarantee a rate cut in the summer, as the Bank of England’s Monetary Policy Committee is paying less attention to food prices and instead keeping a closer eye on services inflation, which is expected to remain well above 5%.