UK grocery inflation eases further, says Worldpanel

British grocery price inflation fell to its lowest rate since October 2024 in August, according to a report by market researcher Worldpanel by Numerator. Like-for-like grocery inflation stood at 2.1% in the four weeks to August 9, down from 2.6% the previous month and 3.0% the one before that. This data provides an early indication of food pricing pressures in August and offers more relief to households facing high living costs. Official inflation data for July will be released on Wednesday.

UK food inflation has not reached the levels initially forecasted due to intense supermarket competition, consumers resisting further price hikes, and better hedging by suppliers. The new Prime Minister, Andy Burnham, has made tackling the cost of living a priority.

UK grocery sales increased by 2.5% over the four weeks year-on-year, with 31.3% of sales containing a deal. The hot weather led to a 58.4% surge in sun cream sales, while ice cream and sorbet sales rose by 26.1%. Worldpanel reported that over the 12 weeks to August 9, Tesco's sales grew by 1.8% year-on-year, but its market share slipped for the third consecutive report.

Sainsbury's saw a 3.5% rise in sales, while Marks & Spencer remained the fastest-growing food retailer, with a 15.9% increase in grocery sales. Online supermarket Ocado and discount store Lidl also experienced significant growth, with sales increases of 13.1% and 8.5%, respectively. Asda's sales fell by 0.2%, marking its best performance since March 2024.

Market share and sales growth among UK supermarkets were as follows: Tesco, Sainsbury's, Marks & Spencer (not fully included in Worldpanel data), Ocado, Lidl, and Asda.