Grocery price inflation eases to lowest level since April

Grocery price inflation eased back to 4% in January, its lowest level since April,  in some relief for households, latest figures show.

The fall from December’s 4.3% came as spending on supermarket own label goods accounted for 52.2% of grocery sales, the highest level recorded, according to market research firm Worldpanel by Numerator.

Spending on items on promotion rose by 10.9% year on year, marking the fastest rate of growth since October 2024, while sales of full-price products rose by just 1.7% compared to the same four weeks last year.

Fraser McKevitt, head of retail and consumer insight at Worldpanel, said: “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.”

In January almost a quarter of shoppers (23%) sought high-protein food and 26% looked for high-fibre products, a survey for Worldpanel found.

Sales of cottage cheese were up 50% year on year, bought by 2.8 million households – about 600,000 more than last year.

Sales of fresh fruit and dried pulses were up 6% year on year, alongside fresh fish, up 5%, poultry, up 3%, and chilled yoghurt, up 4%.

So-called functional drinks, those marketed as providing health benefits such as energy, gut health or mood enhancement, were bought by 11% of households, with spending up 13% on last year.

Mr McKevitt said: “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.”

Lidl was the fastest-growing bricks-and-mortar retailer, with sales up by 10.1% over the 12 weeks to January 25 compared to the same period last year.

Sales at Ocado increased by 14.1%, taking the online grocer’s market share to 2.1%.

Sainsbury’s saw a 5.3% rise in spending through the tills, while Tesco saw sales increase by 4.4% to take 28.7% of the market.

Waitrose achieved the fastest rise in average spending per trip among the grocers but its market share held steady at 4.7%.

Sales of grocery items at M&S were 6.9% higher compared to the same quarter last year.

Asda’s sales were down 3.7% on a year earlier, while Co-op’s sales were 1.6% lower.