Supermarket inflation in Britain holds near 5% as shoppers pay more for chocolate, meat and butter

Supermarket price inflation in Britain remained close to 5% in early September, driven by higher costs for chocolate, fresh meat and butter or spreads, according to market research firm Worldpanel by Numerator.

Grocery prices were 4.9% higher than a year earlier in the four weeks to Sept. 7, the firm said, a slight dip from August's 5.0% and July's 5.2% but well above the 1.6% recorded in July last year when the Labour government took office. The grocery inflation rate also exceeded the United Kingdom's overall Consumer Prices Index inflation rate, which stood at 3.8% in the most recent Office for National Statistics release.

Worldpanel said some product prices were falling, with the largest recent declines seen in household paper, sugar confectionery and dog food. Take‑home grocery sales grew 4.8% in the four weeks to Sept. 7 compared with the same period a year earlier, reflecting a mixture of higher volumes and rising prices.

Fraser McKevitt, head of retail and consumer insight at Worldpanel, said prices "might not be climbing quite as quickly, but they're still on the rise and the battle between own label lines and brands continues as household finances remain tight." He noted that supermarkets' own‑label products now make up 51.2% of all sales, up from 50.9% a year earlier, and that sales of own‑label lines rose 5.9% in the most recent period compared with 5.3% growth for brands.

McKevitt said premium own‑label goods were the standout performers, with sales up 10.3% and marking six consecutive months of double‑digit growth. He added that branded products were maintaining share in certain categories, including toothbrushes, frozen chicken and baby toiletries.

The return to work and school in autumn shaped buying patterns, Worldpanel found. In the two weeks to Sept. 7, families with children increased purchases of lunchbox staples. Sales of yogurt rose 26%, sliced cooked meats were up 17% and cheddar cheese increased 24% year‑on‑year, the data showed. While sandwiches remained a common lunchbox item, McKevitt said cooked poultry was also growing in popularity.

Grocery retailers also outperformed the wider childrenswear market at back‑to‑school, increasing sales by 8.4% as firms cut average prices and shoppers enlarged basket sizes to take advantage of discounts. Pre‑worn schoolwear accounted for 13.1% of school clothing purchases, Worldpanel said.

Data covering supermarket till rolls for the 12 weeks to Sept. 7 showed total grocer spending of £35.48 billion, up 4.7% from the same period a year earlier. Tesco increased market share the most, rising to 28.4% of sales with spending up 7.7%, its strongest rate since December 2023. Ocado was the fastest growing retailer over the 12 weeks, with sales up 11.9% and online grocery overall up 8.2%.

Among bricks‑and‑mortar players, Lidl recorded the biggest growth, up 11.0% and increasing its market share to 8.2%. Aldi held a 10.7% share with spending up 4.7%. Sainsbury's saw spending rise 5.4% and hold a 15.1% share, while Asda's share was 11.8% and Morrisons 8.4%. Waitrose's grocery sales were 4.3% higher year‑on‑year with a 4.4% share, Iceland's take‑home sales grew 4.7% with a 2.3% share, and Marks & Spencer's grocery sales rose 5.9%.

Industry bodies and retailers warned of further upward pressure on food prices. The Food and Drink Federation said food and drink inflation could reach 5.7% by the end of the year, citing extra costs from higher National Insurance contributions and new packaging taxes. The boss of Aldi warned of "persistent and urgent" pressures on shoppers and said additional business costs could have "ripple effects".

The cost pressures come as the government advances an overhaul of employment rights that includes proposals for "day one" statutory sick pay entitlement, broader protection from unfair dismissal and looser strike rules. The Conservative Party has estimated the measures could add £154 to employers' costs for each new hire on top of an £800 annual cost from the National Insurance rise, figures cited by industry sources.

Worldpanel's data provides a near‑term snapshot of how inflation and shifting shopping habits are reshaping the grocery market, with discounters and own‑label lines growing while branded products retain strength in selected categories. Retailers and industry groups said they were monitoring wider policy and cost changes that could affect prices ahead of the winter holidays.