British shoppers have received a small dose of financial relief as the pace of grocery price increases slowed significantly in the run-up to Christmas, according to the latest industry data.
Promotions Drive Inflation Slowdown
The latest figures from Worldpanel by Numerator reveal that grocery inflation stood at 4.7% in the four weeks to 2 November, marking a noticeable decrease from the 5.2% recorded in the previous four-week period. This development comes as retailers intensify their promotional activities ahead of the crucial Christmas shopping season.
Fraser McKevitt, Head of Retail and Consumer Insight at Worldpanel, commented: "Christmas ads are hitting our screens and the race to the big day is on in the supermarket sector. Retailers are very alive to the financial struggles that some households are facing, not least ahead of this year's budget."
Winners and Losers in Price Changes
The data highlights significant variations in price movements across different product categories. Consumers are feeling the pinch most acutely in several key areas:
- Chocolate confectionery
- Fresh meat
- Coffee
Conversely, shoppers are finding better value in other parts of the supermarket, with prices falling fastest for:
- Household paper
- Sugar confectionery
- Dog food
The shift towards promotional spending is particularly striking. Spending on deals surged by 9.4% compared with just 1.8% for full-priced goods. Remarkably, nearly 30% of all consumer spending at grocers went towards promoted items in October, with expectations this figure will climb even higher as Christmas approaches.
Supermarket Performance Diverges
The competitive landscape shows clear winners emerging from the current trading environment. Online specialist Ocado registered an impressive 15.9% jump in sales compared with the same period last year, while discount retailer Lidl and market leader Tesco also performed strongly.
However, the news wasn't positive for all retailers. Asda continued to struggle, with sales declining by 3.9% amid the challenging market conditions.
This grocery inflation data arrives against a backdrop of steady overall UK inflation, which held at 3.8% in September. All eyes now turn to the next official inflation figures due on 19 November, shortly before Chancellor Rachel Reeves presents her budget on 26 November.
McKevitt added: "They're eager to show how they're offering shoppers value for money, putting the emphasis on price cuts rather than multibuy offers. It's not just the Grinch who's looking for savings."
