Grocery price inflation in the UK eased to 4.0 per cent in January, marking its lowest level since April and offering a measure of relief to households struggling with the cost of living, industry data showed on Tuesday. The decline from December’s 4.3 per cent rate reflects a moderation in the pace of food price rises after months of elevated inflationary pressure, according to market researcher Worldpanel by Numerator. The figures provide an early indication of pricing trends ahead of the official inflation statistics scheduled for release later this month.
In the four weeks to January 25, British grocery sales rose 3.8 per cent in value terms compared with the same period a year earlier, though when inflation is taken into account this represented an actual drop in volumes purchased, underlining the tight budget constraints facing consumers. The Bank of England continues to monitor food prices closely, as they play a key role in shaping overall inflation expectations for households and businesses alike.
The latest shopping patterns suggest that value remained front of mind for many UK consumers as they reset their household budgets after the holiday season. Spending on supermarket own-label products reached a record high, accounting for more than half—52.2 per cent—of all grocery spending in the period, as shoppers increasingly swapped branded items for cheaper alternatives to stretch their pounds further. Promotional deals also gained traction, with spending on discounted products up nearly 11 per cent year-on-year, the fastest growth since late 2024. Sales of full-priced items rose by just 1.7 per cent over the same period.
Industry analysts noted that the shift towards budget-friendly options is part of a broader trend in consumer behaviour amid ongoing economic pressures. Fraser McKevitt, head of retail and consumer insight at Worldpanel, pointed out that many households used January as a chance to bring grocery expenses under control, reinforcing the prominence of value purchases in the overall market.
Alongside pricing shifts, there were notable changes in what consumers were putting into their baskets. Sales volumes of fresh fruit and dried pulses climbed, reflecting interest in healthier eating choices at the start of the year, with fresh fish and poultry also seeing increases. Chilled yoghurt and other high-protein staples attracted more buyers, while cottage cheese sales jumped sharply. Nearly a quarter of shoppers sought out high-protein products, and more than a quarter looked for high-fibre options, highlighting a trend towards diets perceived as more nutritious.
Despite efforts by many to adopt healthier food habits, retailers reported that some seasonal diet trends, such as “Veganuary,” were losing momentum, with consumers favouring a more balanced approach that included familiar nutrition-focused items rather than extreme dietary shifts.
The changing dynamics of UK grocery shopping were also reflected in the performance of individual retailers. In the 12 weeks to January 25, Tesco and Sainsbury’s saw gains in sales and market share, while discount chain Lidl posted strong growth among physical store operators. Online grocer Ocado continued to lead overall growth, driven by convenience and digital demand. By contrast, some traditional players, including Asda and the Co-operative, registered declines in sales and share, underscoring competitive pressures in the sector.
The easing in grocery inflation, while welcome, does not signal a complete end to cost pressures for British households. With food prices and other living costs still elevated relative to pre-pandemic levels, many consumers remain cautious about future expenditure, and economists will be watching the upcoming official inflation release for further clues on how pricing trends are evolving across the broader economy.
