Grocery price inflation saw a slight increase in August, according to data from Worldpanel by Numerator. Supermarket prices are now 2.3% higher than they were a year ago, up from 2.1% in August. This trend reflects ongoing pressures from the cost of living, which is shaping how households spend their money. For example, average spending on school uniforms dropped by 12.4% to £54.53 during the back-to-school period compared to the same time last year. Many families are choosing cheaper options, such as promotions and second-hand items, to manage their budgets.
Supermarket visits also declined, with 18 million fewer trips in September compared to the July peak of 497 million. Fraser McKevitt, head of retail and consumer insight at Worldpanel, explained that the end of summer holidays usually leads to fewer shopping trips and a focus on essential purchases. While grocery inflation rose slightly last month, it is still much lower than earlier in the year, offering some relief to households.
McKevitt noted that value is the top concern for parents during the back-to-school season. Over four in 10 households are prioritizing cost savings over quality, while a third are trying to find a balance between the two. This trend indicates that many families are facing financial challenges as the school year starts. Retailers that can offer good prices without sacrificing quality are likely to be more successful.
Children's lunchboxes often include sandwiches, and the number of households with children buying bread increased by more than half a million in the week ending September 6 compared to the previous week. There was also a notable rise in the purchase of satsumas and cucumbers, by 29% and 21% respectively, in the final week before the school term began. Overall, spending on deals increased by £243 million, or 7%, year on year, far outpacing the 1.4% growth in full-price sales.
Asda reported a 0.1% sales increase over the 12 weeks to September 6, marking its first growth since March 2024. The Leeds-based retailer now holds an 11.5% market share, with a stronger presence in the north of England at 16%. It is performing well in categories like hot drinks, ice cream, and chilled poultry. Ocado, on the other hand, has been the fastest-growing grocer for the 30th consecutive month, with sales up 13.3% year on year, giving it a 2.2% market share. Lidl also saw its market share rise to 8.7% from 8.3% a year ago, driven by strong sales in confectionery, soft drinks, and fresh produce.
Grocery Price Inflation Rises as Consumers Adjust Spending Habits
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