Supermarket prices in the UK rose 3.3% over the four weeks to February 23, according to research firm Kantar, marking the same increase as the previous month. Despite this, British consumers are increasingly turning to discount offers and loyalty schemes to manage rising grocery costs.
Shoppers Cut Back on Ingredients and Snacking
Kantar’s data reveals that households are using fewer ingredients per meal and reducing snack purchases compared to pre-pandemic shopping habits. Discounted items now account for 27.6% of supermarket baskets, reflecting a 0.3 percentage point increase from last year.
To attract price-conscious shoppers, major supermarket chains such as Tesco and Sainsbury’s are expanding their loyalty programs, including Tesco’s Clubcard and Sainsbury’s Nectar points, to counter growing competition from Aldi and Lidl.
Food Prices at a Five-Month High
Official data published last month showed food prices climbing 3.3% in the year to January, up from 2% in December. Meanwhile, the British Retail Consortium (BRC) reported that food costs have reached a five-month high, despite overall shop prices remaining in deflation.
Tesco and Discount Grocers See Sales Growth
Despite price pressures, Tesco, the UK’s largest supermarket chain, saw sales rise 5.8% over the 12 weeks to February 23, boosted in part by its Clubcard program. Lidl also recorded an 8.1% increase in sales, as shoppers sought lower-priced alternatives.
Upcoming Price Pressures in April
Looking ahead, food price pressures may intensify in April, when Labour’s planned employment tax hike takes effect. Certain grocery staples, including eggs, bread, cheese, and coffee, have already seen some of the sharpest price increases, according to industry data.
As UK households adjust their shopping habits to navigate rising food costs, supermarkets are expected to maintain heavy discounting and loyalty incentives to retain customers in an increasingly competitive market.
