Grocery price inflation has eased back to 4% in January, marking its lowest level since April and offering some relief for households across the United Kingdom. This latest figure represents a decline from December's rate of 4.3%, according to fresh data from market research firm Worldpanel by Numerator.
Value Remains Paramount for Shoppers
As consumers continue to navigate economic pressures, value has become a central focus for many households. Spending on supermarket own-label goods accounted for 52.2% of all grocery sales in January, reaching the highest level ever recorded. This shift toward more affordable alternatives demonstrates how budget-conscious shopping behaviours are reshaping the retail landscape.
Promotional spending saw a substantial increase of 10.9% year on year, representing the fastest growth rate since October 2024. In contrast, sales of full-price products rose by just 1.7% compared to the same four-week period last year, highlighting the ongoing emphasis on finding deals and discounts.
Health and Wellness Trends Gain Momentum
Despite financial constraints, many shoppers are prioritising health and wellness in their grocery choices. A survey conducted for Worldpanel revealed that nearly a quarter of consumers (23%) actively sought high-protein foods during January, while 26% looked for high-fibre products.
This health-conscious approach translated into significant sales increases across several categories. Cottage cheese experienced remarkable growth, with sales up 50% year on year and purchased by approximately 2.8 million households – about 600,000 more than the previous year.
Other categories showing strong performance included fresh fruit and dried pulses (up 6%), fresh fish (up 5%), poultry (up 3%), and chilled yoghurt (up 4%).
Functional Drinks Command Premium Prices
So-called functional drinks, marketed as providing specific health benefits such as energy boosts, gut health improvements, or mood enhancement, were purchased by 11% of households. Spending on these products increased by 13% compared to last year.
Fraser McKevitt, head of retail and consumer insight at Worldpanel, commented: "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. Functional drinks cost nearly four times as much as typical soft drinks at £4.69 per litre."
Retailer Performance Varies Significantly
The latest figures reveal divergent performances among major grocery retailers. Lidl emerged as the fastest-growing bricks-and-mortar retailer, with sales increasing by 10.1% over the 12 weeks to January 25 compared to the same period last year.
Online grocer Ocado achieved impressive growth of 14.1%, expanding its market share to 2.1%. Among traditional supermarkets, Sainsbury's saw a 5.3% rise in spending through the tills, while Tesco recorded a 4.4% sales increase, maintaining its market leadership with 28.7% of the market.
Waitrose achieved the fastest rise in average spending per trip among grocers, though its market share remained steady at 4.7%. Marks & Spencer reported grocery sales 6.9% higher compared to the same quarter last year.
However, not all retailers experienced positive momentum. Asda's sales declined by 3.7% on a year earlier, while Co-op's sales were 1.6% lower.
Mr McKevitt summarised the January trends: "For most shoppers, January is all about resetting household budgets, and this year was no exception. 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."
