Grocery price inflation falls slightly to 5% in August

Supermarket inflation fell slightly this month but remains “well past the point at which price rises really start to bite”, according to latest figures.

Grocery prices were 5% higher than a year ago in the four weeks to August 10, according to market research firm Worldpanel by Numerator, which was recently renamed from Kantar.

However, this was down from July’s 5.2%, which represented a rise from inflation of 4.7% a month earlier and marked the highest level since January 2024.

‘Marginal drop’

Fraser McKevitt, head of retail and consumer insight at Worldpanel, said: “We’ve seen a marginal drop in grocery price inflation this month, but we’re still well past the point at which price rises really start to bite and consumers are continuing to adapt their behaviour to make ends meet.

“What people pay for their supermarket shopping often impacts their spending across other parts of the high street too, including their eating and drinking habits out of the home.”

Mr McKevitt said casual and fast service restaurants especially had seen a decline in visitors over the summer, with trips falling by 6% during the three months to mid-July 2025 compared with last year.

Despite the ongoing cost pressures, customers still appear to be seeking to include treats in their baskets, with sales of branded grocery items growing by 6.1% this month, ahead of own-label alternatives which were up by 4.1%.

Branded sales

Branded sales mad up 46.4% of all grocery spending but were particularly popular across personal care, confectionery, hot drinks and soft drinks, where they accounted for more than 75% of money through the tills.

Sales of premium own-label products also rose by 11.5% this period.

Worldpanel’s data also shows that more than half of households bought a box of frozen fish fingers over the last year, ahead of the product turning 70 in September.

Mr McKevitt said: “The humble fish finger remains as popular as ever and nearly one billion were sold in the past year, with more than half of households grabbing a box.”

He added: “The average home cook now spends three minutes less preparing the evening meal than they did in 2017 at just under 31 minutes.

“We can see this trend in the growth of things like microwaveable rice, ready meals and chilled pizza too, which have grown by 8%, 6% and 5% respectively.”

Lidl and Ocado were tied for top spot as the fastest growing grocers over the 12 weeks to August 10, with sales at both retailers up by 10.7% compared to the same period last year.

Tesco enjoyed its largest monthly share gain since December 2024 as its hold of the market rose by 0.8 percentage points to 28.4%, driven by sales growth of 7.4% compared to last year.

Asda and Co-op both saw sales down on a year ago, by 2.6% and 3.2% respectively.