Grocery price inflation in the United Kingdom has eased to 4 per cent in January, marking its lowest point since April and offering a measure of relief to households across the nation. This decline from December's rate of 4.3 per cent coincides with significant shifts in consumer behaviour, as shoppers increasingly prioritise value and health-conscious choices.
Record High for Own-Label and Promotional Spending
According to the latest data from market research firm Worldpanel by Numerator, a record 52.2 per cent of grocery sales now comprise supermarket own-label goods. This trend underscores a growing preference for value-oriented products amidst ongoing economic pressures.
Spending on promotional items surged by 10.9 per cent year-on-year, representing the fastest growth observed since October 2024. In contrast, sales of full-price products saw a modest increase of just 1.7 per cent over the equivalent four-week period compared to the previous year.
Consumer Focus on Budgets and Wellness
Fraser McKevitt, head of retail and consumer insight at Worldpanel, commented on the January trends. "For most shoppers, January is all about resetting household budgets, and this year was no exception," he stated. "While grocery sales continue to grow and inflation eased to its lowest level in months, value remained front of mind for many, with own-label hitting a record high, accounting for more than half of all grocery spend."
Simultaneously, a survey for Worldpanel revealed that nearly a quarter of shoppers (23 per cent) actively sought high-protein foods, while 26 per cent looked for high-fibre products in January. This indicates a sustained interest in health and nutrition, even during a traditionally frugal month.
Notable Sales Increases Across Product Categories
Several specific product categories experienced substantial growth. Sales of cottage cheese soared by 50 per cent year-on-year, purchased by approximately 2.8 million households—an increase of about 600,000 from the previous year.
Other categories also saw positive movement:
- Fresh fruit and dried pulses: up 6 per cent
- Fresh fish: up 5 per cent
- Poultry: up 3 per cent
- Chilled yoghurt: up 4 per cent
Furthermore, so-called functional drinks—those marketed for health benefits like energy, gut health, or mood enhancement—were purchased by 11 per cent of households. Spending in this niche category increased by 13 per cent compared to the previous year.
Mr McKevitt noted this apparent contradiction: "In a month when consumers typically look to rein in spending, it is notable how many are still willing to pay a premium for wellness, with functional drinks costing nearly four times as much as typical soft drinks at £4.69 per litre."
Retailer Performance Highlights Market Dynamics
The shifting landscape is reflected in the performance of individual retailers. Lidl emerged as the fastest-growing bricks-and-mortar retailer, with sales increasing by 10.1 per cent over the 12 weeks to 25 January compared to the same period last year.
Online grocer Ocado saw a significant sales increase of 14.1 per cent, boosting its market share to 2.1 per cent. Among the major traditional supermarkets:
- Sainsbury's experienced a 5.3 per cent rise in spending
- Tesco's sales grew by 4.4 per cent, capturing 28.7 per cent of the market
- Waitrose achieved the fastest rise in average spending per trip, though its market share remained steady at 4.7 per cent
- Marks & Spencer's grocery sales were 6.9 per cent higher compared to the same quarter last year
Conversely, some retailers faced challenges. Asda's sales declined by 3.7 per cent on a year earlier, while Co-op's sales were 1.6 per cent lower, highlighting the competitive and evolving nature of the UK grocery sector.
