Worldpanel by Numerator reports that UK grocery inflation eases to 2.1% in the four weeks to 9 August, the lowest reading since October 2024 and the fifth consecutive monthly decline, as shoppers lean harder on promotions and value ranges to manage their spending.
The rate has dropped steadily: from 3.0% two months ago to 2.6% last month to 2.1% now, according to Reuters citing Worldpanel. Underlying grocery sales volumes rose 2.5% year-on-year over the same period, suggesting shoppers are buying more even as prices cool.
The deal culture driving that growth is striking in its own right. Some 31.3% of all grocery sales in the last month included a promotion, the highest share this year. At the same time, 96 million shopping trips included a value own-label product in those four weeks. Premium own-label ranges did nudge back into double figures at 11.1% growth, but the dominant story is one of households still shopping defensively.
Sally Ball, business unit director at Worldpanel by Numerator, said: ‘With inflation slowing again, this marks the fifth consecutive month of easing prices. Shoppers are feeling the relief with 39% now feeling financially comfortable, marking the highest level of financial confidence since November 2021. But it’s by no means the same picture for all, with 20% reporting that they are struggling, and this has a clear impact on spending decisions. Among these households, 30% are more likely to prioritise grocery essentials over additional summer spending such as holidays and travel.’
That split matters. A majority are feeling more at ease; a fifth are not. The aggregate number obscures a retail landscape where two very different consumer experiences are unfolding simultaneously.
Where UK Grocery Inflation Eases Most: Winners and Losers by Retailer
The market-share picture is more contested than the headline inflation figure implies. Marks and Spencer remained the UK’s fastest-growing food retailer over the 12 weeks to 9 August, posting a 15.9% rise in grocery sales, though Reuters notes it is not fully included in the Worldpanel data set. Ocado was second fastest-growing at 13.1%, lifting its market share from 1.9% to 2.1% year-on-year. Lidl came third with 8.5% sales growth and an 8.8% market share.
Tesco, by contrast, grew sales by 1.8% over the 12 weeks but saw its market share slip for the third consecutive report, from 28.1% to 27.8%. Growth without share is a slow puncture for the UK’s largest grocer. Asda’s sales fell 0.2% over the same period, though Reuters notes that was its best performance since March 2024.
The direction of travel at the premium and discount ends is pulling in opposite directions, and Tesco is being squeezed from both.
Hot Weather Drives a Summer Spending Spike
Summer conditions shaped the basket meaningfully. Ice cream and sorbet sales rose 26.1%, suncream jumped 58.4%, and soft drink spend grew 15.1%. Dips, coleslaw and potato salad all rose by more than 22%. Ball noted that mealtimes have shifted later: ‘Earlier this summer we saw that mealtimes were being pushed later in the day, with 13% of evening meals now eaten after 8pm.’
Chilled and outdoor-eating categories followed the same pattern, with finger foods up 15.2%, chilled quiche up 15.8%, and chilled olives up 13.3%.
The Worldpanel data lands one day before the Office for National Statistics official inflation release, which showed overall CPI at 3.8% and core inflation at 3.6% for August 2025, down from 3.8% the month prior. The Bank of England had been watching closely, having forecast CPI could peak at 4% in September 2025, per CNBC. Grocery inflation running below 2.5% while headline CPI sits at 3.8% tells you where the pressure is easing and where it is not.
The key test for the autumn is whether grocery inflation can hold below 3% as energy costs and wage settlements feed into supplier pricing. If Tesco’s market share keeps slipping at the current pace, the competitive response from the UK’s largest grocer could accelerate that descent faster than the calendar alone would suggest.
