Grocery price inflation speeds up as families alter spending choices

Grocery price inflation sped up in August amid signs that the cost of living is altering household spending choices, figures show.

Supermarket prices are now 2.3% higher than a year ago following August’s drop to 2.1%, data from Worldpanel by Numerator shows.

As the academic year began, average customer spending on school uniform fell 12.4% to £54.53 on the same period last year as households turned to promotions and second-hand items to manage budgets.

Overall, shoppers made 18 million fewer supermarket trips to the grocers in September than at the July peak of 497 million.

Fraser McKevitt, head of retail and consumer insight at Worldpanel, said: “The end of the summer holidays typically brings a cooling in trip frequency and a pivot towards priority purchases, and this year is no exception.

“While grocery inflation ticked up modestly last month, it remains significantly lower than the levels we saw earlier in the year, giving households some welcome breathing room.”

He added: “Value is the watchword for parents this back-to-school season.

“More than four in 10 households (44%) are now prioritising keeping costs low above all else when it comes to buying uniform, even if that means compromising slightly on quality, while a third (33%) are still looking to strike a balance between the two.

“It’s a clear sign that, for many families, the return to school is landing at a difficult time financially, and retailers who can offer reassurance on price without compromising on quality will stand in good stead.”

Sandwiches featured in more than half of all children’s lunchboxes, and the number of households with children buying loaves of bread rose by more than half a million in the seven days to September 6 compared with the previous week.

The number of households buying satsumas and cucumbers also surged, by 29% and 21% respectively, in the final week before term time.

Across all grocery items, spending on deals rose by £243 million, or 7% year on year, significantly outstripping full-price sales growth of just 1.4%.

Sales at Asda rose by 0.1% over the 12 weeks to September 6 as the grocer returned to growth for the first time since March 2024.

The Leeds-based retailer now holds a market share of 11.5%, with a higher share of 16% in the north of England, and it is outperforming the market in categories such as hot drinks, ice cream and chilled poultry.

Ocado was the fastest growing grocer for the 30th consecutive month with sales up by 13.3% year on year to give it 2.2% of the market.

Lidl increased its share of the market to 8.7% from 8.3% a year ago, helped by strong sales of confectionery, soft drinks and fresh produce.