Recent data reveals a significant easing in grocery price inflation, which has dropped to 4% in January, marking the lowest level since April 2026. This decline provides a measure of relief for households as they navigate a challenging economic landscape. The figures, published by market research company Worldpanel, indicate a notable shift in consumer spending habits, particularly towards supermarket own label products.
Shift in Consumer Preferences
The latest research highlights that a record 52.2% of total grocery sales in January were attributed to own-label products, reflecting a growing preference for budget-friendly options amidst ongoing inflationary pressures. Fraser McKevitt, head of retail and consumer insight at Worldpanel, noted, “For most shoppers, January is all about resetting household budgets, and this year was no exception.”
As consumers become increasingly cost-conscious, the trend towards own-label goods suggests a strategic shift in grocery shopping, as households seek to balance their budgets while still addressing nutritional needs. In conjunction with these trends, spending on promotional items surged by 10.9% year on year, marking the fastest growth rate since October 2024. Conversely, sales of full-price items saw a more modest increase of only 1.7% compared to the same period last year.
Health-Conscious Choices on the Rise
Interestingly, the data also uncovers a growing interest in health-related food products. A survey conducted for Worldpanel identified that 23% of shoppers sought high-protein foods, while 26% were in search of high-fibre options in January. Notably, sales of cottage cheese surged by 50% year on year, drawing in 2.8 million households—an increase of approximately 600,000 from the previous year.
Additionally, fresh fruit and dried pulses experienced a 6% increase in sales, fresh fish rose by 5%, while poultry and chilled yogurt sales grew by 3% and 4%, respectively. The popularity of functional beverages, which promote health benefits such as energy and gut health, is also notable. These drinks were purchased by 11% of households, with spending up 13% compared to last year. McKevitt observed that consumers are still willing to invest in wellness products, despite typically tighter budgets in January.
Retail Landscape Dynamics
Amidst these shifting consumer behaviours, the competitive landscape among retailers remains dynamic. Lidl emerged as the fastest-growing brick-and-mortar retailer, witnessing a sales increase of 10.1% over the 12 weeks leading up to January 25, year on year. Ocado, the online grocery platform, reported an impressive 14.1% rise in sales, expanding its market share to 2.1%.
Sainsbury’s and Tesco also experienced growth, with sales increasing by 5.3% and 4.4%, respectively. Notably, Tesco commands a substantial 28.7% of the market share. Waitrose reported the highest rise in average spending per transaction among grocery retailers, although its market share remained unchanged at 4.7%. Meanwhile, Marks & Spencer’s grocery sales climbed 6.9% compared to the same quarter last year, while Asda and Co-op faced declines of 3.7% and 1.6%, respectively.
Why it Matters
The latest data on grocery price inflation and consumer spending patterns underscores a pivotal moment for households grappling with economic uncertainties. As inflation eases, the increasing inclination towards own-label products and health-focused foods reflects a broader trend of value-seeking behaviour among consumers. Retailers will need to adapt to these shifting preferences to remain competitive. Ultimately, understanding these dynamics will be crucial for both consumers and businesses as they navigate the evolving landscape of grocery shopping in 2026.
