UK grocery inflation moderated to 4.0% in the four weeks ending January 25, the weakest reading since April of last year, according to data released by market researcher Worldpanel by Numerator. That is down from a 4.3% reading in Worldpanel’s previous update and offers an early signal on price trends ahead of the government’s official inflation figures due on February 18.
The Bank of England is paying close attention to food price movements, viewing them as influential on the public’s broader inflation expectations. Britain’s headline inflation rate stood at 3.4% in December, a level noted as the highest among the Group of Seven economies in the period referenced by the data release.
Worldpanel also reported that grocery sales grew 3.8% year-on-year in value terms over the four-week period to January 25. When adjusted for inflation, however, this represents a decline in physical volumes purchased by consumers.
On shopper behaviour, Fraser McKevitt, head of retail and consumer insight at Worldpanel, said: "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."
Retailer performance over the 12 weeks to January 25 showed a mixed picture, with market leader Tesco expanding both sales and share, while some rivals lagged. Key movements reported by Worldpanel for the 12-week period include:
| Retailer | Market share (Jan 25) | Market share (Jan 26) | Sales change (12 weeks, year-on-year) |
|---|---|---|---|
| Tesco | 28.7 | 28.5 | 4.4 |
| Sainsbury's | 16.2 | 16.0 | 5.3 |
| Asda | 11.5 | 12.3 | -3.7 |
| Aldi | 10.1 | 10.1 | 3.8 |
| Morrisons | 8.4 | 8.5 | 2.5 |
| Lidl | 7.7 | 7.3 | 10.1 |
| Co-operative | 5.0 | 5.3 | -1.6 |
| Waitrose | 4.7 | 4.7 | 5.5 |
| Iceland | 2.3 | 2.3 | 3.2 |
| Ocado | 2.1 | 1.9 | 14.1 |
Worldpanel highlighted several retailer-specific trends. Tesco, the market leader, recorded a 4.4% rise in sales and grew market share by 20 basis points to 28.7% over the 12-week window. Sainsbury’s saw sales climb 5.3%, lifting its share to 16.2%.
Discount chain Lidl GB was identified as the fastest growing bricks-and-mortar supermarket, with sales up 10.1%. Online grocer Ocado posted the strongest overall sales growth at 14.1%.
By contrast, Asda continued to struggle, with sales down 3.7% year-on-year and market share slipping to 11.5%, an 80 basis point decline on the prior year.
The Worldpanel snapshot provides an early reading on grocery pricing and consumer choices ahead of official inflation statistics. The data underlines that while headline grocery inflation has eased to 4.0% in the short-term window measured, consumers are increasingly favouring lower-cost own-label options and retailers are experiencing divergent performance across channels and formats.