The Tesco share price is slightly lower this Tuesday after data from Kantar showed that UK grocery inflation in June rose to 8.3% in the four weeks preceding 12 June. UK annual grocery bills are also set to rise to an average of 380 pounds, according to the same report.
Industry data also showed that UK shoppers are now switching to value range items and cheaper own-label products, abandoning branded products to beat inflationary pressures. Sales of branded items in the UK’s top supermarkets dropped 1.0% in the four weeks under review on a year-on-year basis. Conversely, own-label products have seen a 2.9% spike in sales.
At 8.3%, UK grocery inflation is now at its highest in thirteen years. Despite the situation, Tesco was able to gain market share based on sales value within the 12 weeks preceding 12 June. However, the Tesco share price appears to be struggling after an underwhelming start to the week. It is down 0.28% as of writing.
Tesco Share Price Forecast
The price candles are testing the wedge’s upper border and the 253.3 resistance level (26 August 2021 and 25 May 2022 lows). A break of these resistance barriers completes the pattern and clears the way toward the 259.8 resistance, where the 17 September 2021 and 9 June 2022 highs are located. Above this level, 264.8 (14 October 2021 and 8 March 2022 lows) and 269.6 (6 April and 12 May 2022 lows) form additional targets to the north. The latter marks the completion point of the measured move from the wedge.
Conversely, rejection at the wedge’s upper border/253.3 resistance level favours a move by the bears to force price action towards the next pivot at 246.6. A breakdown of this level sends the price activity toward 239.7 (17 August 2021 low). At this point, the wedge’s lower border also serves as a support. A breakdown of this level invalidates the pattern and clears the path toward 230.3 (30 July 2021 low).