UK grocery price inflation continued to ease in August, dropping to its lowest level in almost two years and providing some relief for households still facing elevated living costs, according to the latest figures from Worldpanel by Numerator.
Like-for-like grocery inflation stood at 2.1% during the four weeks to 9 August, down from 2.6% in Worldpanel’s previous monthly report and 3.0% in the report before that.
The figures provide one of the most recent indications of consumer spending and food price trends in Britain ahead of the release of official UK inflation data for July on Wednesday.
Food inflation has remained below some of the higher forecasts made earlier in the year. Intense competition between supermarkets, resistance among consumers to further price increases and more effective hedging by suppliers have helped limit inflationary pressures.
Prime Minister Andy Burnham has identified tackling the cost of living as a priority for the new government.
Promotions Account for Almost a Third of Grocery Spending
UK grocery sales increased 2.5% year on year during the latest four-week period, with shoppers continuing to make extensive use of supermarket promotions.
Around 31.3% of grocery sales were made as part of a promotional deal, highlighting the importance of discounts as consumers continue to manage household budgets carefully.
Hot summer weather also influenced shopping patterns. Sales of sun cream jumped 58.4%, while spending on ice cream and sorbet increased 26.1%.
Sainsbury’s Outpaces Tesco as M&S Leads Growth
Over the 12 weeks to 9 August, market leader Tesco (LSE:TSCO) recorded a 1.8% year-on-year increase in sales. However, its share of the grocery market edged lower for a third consecutive Worldpanel report.
Sainsbury’s (LSE:SBRY), the UK’s second-largest supermarket operator, performed more strongly, with sales increasing 3.5% over the period.
Marks & Spencer (LSE:MKS), which is not fully represented within Worldpanel’s data set, remained Britain’s fastest-growing food retailer. Grocery sales increased 15.9% year on year.
Online supermarket Ocado (LSE:OCDO) ranked second for growth, recording a 13.1% increase in sales, while Lidl followed with an 8.5% rise.
Asda remained under pressure, with sales declining 0.2%. Nevertheless, the result represented the supermarket chain’s strongest performance since March 2024.
Lower Inflation Offers Some Relief to UK Households
The continued slowdown in grocery inflation could provide further support for household purchasing power if the trend persists.
However, promotional activity remains an important component of consumer spending, while differences in sales growth between individual supermarkets indicate that competition for market share remains intense.
With official inflation figures due shortly, Worldpanel’s latest data provides an early indication that food price pressures continued to moderate during August.
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