As UK supermarkets and online retailers aggressively cut prices to win over consumers, food inflation hits its lowest rate in over two years, indicating a shift in shopping behavior amidst the cost of living crisis.
In the latest update on the UK’s retail sector, food inflation has seen a notable decrease, reaching its lowest point in over two years. As of March 17, food prices were reported to have risen by only 4.5% in the four weeks leading up to this date. This reduction is part of a broader effort by supermarkets to attract customers amid the continuing cost of living crisis by lowering prices on various products.
Notably, the online grocer Ocado, in partnership with Marks & Spencer, has seen a noteworthy increase in its customer base, with sales climbing by 9.5% during the 12 weeks up to March 17. This growth rate outperforms that of competitors, including Aldi. The surge in sales for Ocado is partially attributed to its strategy of price cuts, which has successfully attracted more than one million active shoppers, marking a 10.6% increase in the company’s sales over the last quarter.
Additionally, consumer trends have shown a shift towards premium own-label products, which have experienced a 16.1% increase in sales, the fastest growth in almost three years. This change suggests that shoppers are gaining confidence as the pressures exerted by the cost of living begin to ease, opting for higher-end options such as Tesco’s Finest and Sainsbury’s Taste the Difference ranges.
Other supermarkets, such as Lidl, have also implemented price reductions, particularly on fresh vegetables ahead of Easter, with notable discounts including carrots at 15p per kg and white potatoes at 15p for a 2kg package until March 31. This strategy mirrors the wider trend among supermarkets aiming to draw customers with competitive pricing, especially as food inflation declines and consumer confidence rebounds.
In parallel, the retail landscape is also witnessing promotional activities aimed at online shoppers, with brands like JD Sports, Wayfair, Adidas, and Boden offering discounts to new customers. These offers, ranging up to 15% off initial purchases, are part of a broader effort to enhance the shopping experience online, appealing to varying consumer interests from sportswear to sustainable fashion and home decor.
Collectively, these developments reflect a dynamic phase in the UK’s retail market, where both physical supermarkets and online platforms are actively engaging with changing consumer preferences and financial sensibilities through strategic pricing and discount offerings.
