Grocery Inflation Eases as Supermarkets Offer Deeper Discounts Ahead of Budget

Grocery price inflation in the United Kingdom eased to 4.7 per cent in the four weeks to 2 November, marking a decline from 5.2 per cent reported the month before This shift comes as supermarkets intensify their discount activity in a bid to attract cautious shoppers in the run up to the Chancellor Rachel Reeves’s budget Retailers have responded to consumer unease by increasing the volume and depth of promotions to support household budgets

According to figures released by Worldpanel, spending on promotional deals rose by 9.4 per cent over the month, accounting for roughly 30 per cent of total grocery expenditure Purchases of full priced items experienced only a modest increase of 1.8 per cent The data underlines a clear move in consumer behaviour towards value and discounts, with leading retailers such as Marks and Spencer and Sainsburys noting the later timing of the budget has contributed to household caution as the festive trading quarter approaches

Fraser McKevitt, head of retail and consumer insight at Worldpanel, commented that supermarkets remain acutely aware of the financial pressures on households Retailers are focusing on price cuts rather than multibuy promotions in response to these challenges McKevitt expects the level of discounting to grow even further as Christmas approaches

Official figures recorded UK inflation holding steady at 3.8 per cent in September, with food price increases moderating The next release of inflation data is anticipated later this month Prices have been falling most rapidly in categories such as dog food, toilet paper, and sugar confectionery however, prices continue to rise in chocolate confectionery, fresh unprocessed meat, and coffee

Despite more restrained spending, sales of supermarkets’ premium own label merchandise are forecast to reach a record £1 billion in December, indicating that consumers are opting for higher quality food at home as an alternative to dining out Premium own label sales totalled £582 million over the latest recorded month

UK supermarket take home sales climbed by 3.2 per cent during this period All leading supermarket chains registered growth with the exception of Asda and the Co op Asda saw a 3.9 per cent fall in sales over the last twelve weeks, causing its market share to drop to 11.6 per cent from 11.8 per cent in the preceding quarter The Co op also experienced a fall in market share from 5.7 per cent to 5.4 per cent despite declines in its sales Morrisons reported a slight drop in share from 8.5 per cent to 8.3 per cent even as sales edged up by 2.3 per cent Meanwhile online retailer Ocado delivered a robust 15.9 per cent annual rise in sales, buoyed by its partnership with Marks and Spencer