Grocery price inflation has held steady at 4.3% in March, according to the latest data from Worldpanel by Numerator. However, analysts warn that this figure is likely to increase as the ongoing conflict in the Middle East continues to impact global markets.
Financial Anxiety Intensifies Among Shoppers
The conditions that make shoppers feel vulnerable are only intensifying, with more than 20% of Britons describing themselves as financially struggling. Furthermore, over 60% of consumers reported being very or extremely concerned about the rising price of groceries even before the war began.
Each additional 1% on the rate of inflation could add more than £50 to the annual supermarket bill for the average household, highlighting the significant financial pressure facing many families.
Consumer Behaviour Under Economic Pressure
Fraser McKevitt, head of retail and consumer insight at Worldpanel, commented on the situation. "Financial anxiety among British consumers was already running high before the conflict began," he said. "Shoppers will look to lessen the impact on their baskets when faced with rising prices, and while there remains a level of uncertainty, we are watching the data closely for behavioural changes like trading down and switching which often emerge during periods of economic pressure."
Easter Spending Defies Inflation Concerns
Despite these rising prices, seasonal spending remained robust. Just over 40% of shoppers bought at least one pack of hot cross buns in the past four weeks, and 30% purchased at least one Easter egg.
Mr McKevitt added: "While the pace of chocolate price inflation eased again – down to 8% from 9.3% last month – continued price pressures mean the average amount paid for an Easter egg was 9% higher than last year, up to £3.27. Despite this, there is no sign of shoppers choosing smaller eggs though, with an average weight of 162g, a marginal increase on last year."
Supermarket Market Share Shifts
The retail landscape saw notable changes in market share over the 12 weeks to March 22:
- Lidl increased its market share by 0.5 percentage points – more than any other grocer – to achieve 8.3%, with sales rising 9.6% year on year.
- Ocado grew even faster, with sales rising by 12.3%, now accounting for 2.2% of the market.
- Sainsbury's attracted more new households than any other grocer, with 387,000 more customers than in the same quarter a year ago.
- Tesco made a share gain of 0.3 percentage points, giving them 28% of all sales, with spending up by 5%.
- Asda held 11.6% of the market with sales down 0.9%, although this marked its best performance since April 2024.
- Waitrose saw a 5.8% sales growth, its fastest rate in five years, driven by higher average spending per trip.
This data underscores the complex dynamics at play in the UK grocery sector, where inflation concerns are balanced against resilient consumer spending, particularly during key seasonal periods like Easter.
