Grocery price inflation slowed to a two-year low in February as fierce competition among supermarkets brought down the cost of some items for consumers.

Prices were 5.3% higher than in the same period a year earlier, the lowest since March 2022 and a significant drop from January's 6.8%, according to market analysts Kantar. Grocery sales grew by 5.1% in the four weeks to February 18.

Promotions increased again over the month after a post-Christmas slowdown, and consumers spent £586 million more on them than in February last year.

Shoppers also found room within their budgets to celebrate Valentine's Day, with spending on steak and boxed chocolate up by 12% and 16% compared with last year. Spending on meal deals costing £10 or more during the week leading up to February 14 totalled £36m, slightly down on 2023 when spending hit £43m, with consumers choosing to make more savings through price cuts.

READ MORE: Record numbers hit the shops as food inflation eases

“Things are looking up for shoppers this February," said Tom Steel, strategic insight director at Kantar. "Consumers have been navigating a grocery inflation rate of more than 4% for two years now, so this latest easing of price rises is especially welcome.  
 
“Though there’s been lots of discussion about the impact the Red Sea shipping crisis might have on the cost of goods, supermarkets have been pulling out all the stops to keep prices down and help people manage their budgets."

Amid this intensifying competition Morrisons became the latest to launch a price match scheme with Aldi and Lidl, after Asda made the move in January.  The battle between supermarkets’ own-label lines and brands also remained fierce with own-label up by 5.5% versus branded products at 5.3%.

Lidl was the only retailer to achieve double-digit growth with sales up by 10.9% during the 12 weeks to February 18, making it the fastest-growing grocer for the sixth month running. It now holds a 7.5% share of the market, an increase of 0.4 percentage points. 

Fellow discounter Aldi also grew ahead of the market, boosting sales by 5.7% and maintaining its 9.4% share. 

READ MORE: Cost of living: Food inflation falls to single digits

Sainsbury’s and Tesco increased their share of the market by 0.4 and 0.3 percentage points respectively. Sainsbury’s now holds a 15.6% share with sales up 7.6%, while the 6.2% increase in sales at Tesco pushed the UK's largest grocer to a 27.6% share of the market.
 
Waitrose increased sales by 3.8%, accounting for a 4.6% share. Morrisons’ share now stands at 8.8%, with sales up by 3.1% compared to last year. 

Asda, which is on track to open its 1,000th store as part of its continued expansion into the convenience sector, saw sales increase by 1.9%. It now has a share of 13.8%.
 
Iceland accounts for 2.3% of the market and grew sales by 2.1%, while Co-op’s sales were up by 1.4%, resulting in a 5.3% share for the retailer.

Kantar said grocery inflation for the 12 weeks to February 18 was 6.1% higher than in the same period a year earlier. Prices are rising fastest for items such as sugar confectionery, chocolate confectionery and frozen potato products, and are falling fastest in butter, milk and toilet tissues.