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Highlights
- In the four weeks to May 15, grocery prices in the UK rose at the fastest rate in 13 years.
- The items that saw the sharpest rise include savoury snacks, fresh meat, and dog food.
Inflation in the UK reached the highest levels in 40 years in April as soaring food and energy bills continue to burn a hole in the pockets of millions of Britons. The prices of essential goods and services have risen significantly in comparison to the last year. People are forced to reduce expenses on non-essential things to be able to spend on essentials.
The latest data from market research firm Kantar has revealed that grocery prices in the UK saw the fastest increase in 13 years in the four weeks to May 15. During the period, grocery price inflation reached 7%, up from 5.9% in the previous month, the data showed.
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Among the products that saw the sharpest price rise are fresh meat, savoury snacks, and dog food. On the other hand, prices for spirits came down during the period. Notably, stores reported a rise in overall sales in April, primarily boosted by the sales of alcohol and tobacco, according to the data shared by Office for National Statistics on Friday.
In the wake of the latest figures released, let us take a look at some supermarket stocks and how they have been faring.
Tesco Plc (LON: TSCO)
Tesco is the UK's largest supermarket chain, with a market share of 27.4%. It has over 3,400 stores across the UK, and it is a constituent of the FTSE 100 index. The company recently announced a £10 million support for the country's pig industry, which faces serious challenges due to the rise in on-farm costs.
Tesco's shares closed at GBX 258.30 on 24 May, with a market capitalisation of £19,604.42 million. The shares have provided investors with a return of over 14% in the last one year.
J Sainsbury Plc (LON: SBRY)
J Sainsbury Plc, trading as Sainsbury's, is the UK's second-largest supermarket chain with over 1,400 physical stores along with a digital presence. For the year ended 5 March 2022, the company posted an underlying profit before tax of £730 million. For FY2022, the company expects its underlying profit before tax to stay between £630 million and £690 million.
Sainsbury's holds a market cap of £5,432.96 million, with its one-year return standing at -12.07%. Its shares closed at GBX 232.30 on 24 May.
Marks and Spencer PLC (LON: MKS)
Marks and Spencer is a British multinational company that retails in food, clothing, beauty products, accessories, and home products. It is listed on the FTSE 250 index and holds a market capitalisation of £2,590.69 million. Its share price has witnessed a downward trend in the last four months.
Shares of Marks and Spencer closed at GBX 132.35 on 24 May. The share value has fallen by over 15% in the past one year.
Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
