Grocery price inflation holds steady amid warnings of rises later in year

Grocery prices held steady in February despite fears of increases within months as supermarkets wheeled out promotions to hold on to customers, new figures show.

Grocery price inflation has remained at 3.3% after falling from 3.7% in December – its highest level since last March, according to analysts Kantar.

Items bought on offer by customers now account for 27.6% of sales, a rise of 0.3 percentage points on last year, while premium own-label lines grew 13.3% last month.

Meanwhile, households visited just under five different grocers in February, the lowest level for the month since 2021, partly driven by shoppers making use of loyalty schemes to unlock discounts.

The British Retail Consortium has said it expects food inflation to hit 4% by the second half of the year amid geopolitical tensions and the imminent £7 billion increase in costs from the autumn Budget.

Sally Ball, head of retail at Kantar, said: “Of course, it’s hard to untangle the cost-of-living crisis from any post-Covid analysis, and the other big headline of the past few years has been consumers’ hunt for value.

“You might think that people would shop around more to find the best deals but in fact that’s not the case.”

Tesco has risen to become Britain’s largest grocer – up from second place 30 years ago – since it introduced its Clubcard scheme in 1995.

It held 28.3% of the market in the 12 weeks to February 23, while its sales growth reached its highest since March last year at 5.8%.

Ocado was the fastest-growing retailer for the 10th consecutive month, with spending increasing by 9.6% to hold its share of the market at 1.9%.

Marks & Spencer also continued its growth, with grocery sales climbing by 12.2% across its bricks-and-mortar stores.

Aldi attracted 377,000 more shoppers through its doors to achieve a market share of 10.3% following a 4.9% rise in sales, its highest rate since January last year, while Lidl increased its market share by 0.3 percentage points to 7.3% with sales up by 8.1%.

Sainsbury’s increased its share to 15.7% and Morrisons now holds 8.6% of the market, while Asda continues to be the exception with a fall of 5% on this time last year.

Ahead of the five-year anniversary of the first Covid lockdown, Kantar analysed consumption data to find that people are now using fewer different ingredients when making food, both at lunch and in the evening, while consumers are snacking less often too, dropping more than 330 million “occasions” in 2024 compared with 2020.

Ms Ball said: “Back in 2020, we didn’t know just how big an impact the Covid-19 pandemic would have on our lives, but five years on we can get a picture of its lingering effects on consumers.

“We haven’t gone back to old patterns and shopping trips remain below pre-pandemic times. Households made one less visit to the supermarket in February 2025 than in 2020, while online shopping appears to have stuck, taking a 12.3% market share this month versus 8.6% in February 2020.

“One of the most interesting changes has been a move to simpler eating habits as we look for convenient shortcuts to make our lives easier. People are taking less time to prepare meals, and prep time in the evening, for example, has declined from almost 34 minutes in 2020 to 31 minutes in 2024.”