Shoppers faced a surprise jump in grocery inflation last month after four straight months of declines, while experts warned that the worst is yet to come if there is a prolonged war in the Middle East.
In a blow to households struggling with the cost of living, food price inflation rose to 4.3% in the four weeks to February 22, after falling to 4% in January from 4.7% in December, according to market research firm Worldpanel by Numerator.
Meanwhile, the European Central Bank’s chief economist warned that a prolonged war in the Middle East could lead to lower oil and gas supplies from the region, causing a “substantial rise” in inflation and a “sharp drop in production” in the eurozone.
The crisis has already sent oil and gas prices sharply higher, threatening to raise prices at the pump for UK drivers and increase household gas and electricity bills.
In an interview with the Financial Times, Philip Lane said that “directionally, a jump in energy prices puts upward pressure on inflation, especially in the short term,” and that such developments would be “negative” for growth. This would also apply to the UK.
Fraser McKevitt, head of retail and consumer insights at Worldpanel, said: “Ahead of Easter, shoppers will notice that chocolate prices remain high, up 9.3% year on year.
“While still a significant increase, the pace of inflation in the category is beginning to slow and is now at its lowest level since September 2025.”
However, Greggs said “easing inflationary pressures” should drive greater consumer spending as it revealed a nearly 18% drop in pre-tax profits (£167.4m) in the year to December 27.
The Worldpanel report showed that shoppers spent a lot of money on recent celebrations. Pre-made pancake mixes rose 114% on the previous week in the seven days leading up to Shrove Tuesday, while those making their own batter paid 42p or almost 6% more than last year as the cost of key ingredients hit £7.77.
However, ingredient sales increased: flour increased by 34%, sugar by 17% and lemons by 70%.
Many shoppers left Valentine’s Day spending until the last minute, and nearly 12% of households scored a premium food deal on Friday night alone, according to Worldpanel.
Meat buyers sprang into action late in the week, with sales peaking on Friday and on Valentine’s Day itself. Chocolate lovers also left it late, with Friday being the day with the most chocolate purchases for Valentine’s Day.
However, people spent money on premium dining experiences. In total, they spent £39 million on high-end meal deals priced at £10 or more in the week leading up to Valentine’s Day, seven times more than the week before.
More and more people have been doing their shopping online, and sales made over the Internet increased by 9.7% year-on-year. More than 18 million orders were placed over the four weeks, which meant online shopping accounted for 13% of total grocery sales, the highest level since July 2021.
McKevitt said: “The wealthiest families in London and the south-east of England remain the most likely to buy food online. However, the channel’s appeal is broadening, with shoppers from a wider range of economic backgrounds increasingly attracted to its convenience.”
Online retailer Ocado was once again the fastest-growing supermarket for the 12 weeks to February 22, remaining there since September, with sales growth of 15.1% and market share of 2.1%. Discounter Lidl reported double-digit sales growth for the 12th consecutive month, up 10% and a market share of 7.8%.
Tesco, the largest supermarket chain, increased its sales by 4.5% to raise its market share to 28.5%, while Sainsbury’s increased its market share to 16.1% and sales increased by 5.2%.
Sales at Waitrose, part of the John Lewis Partnership, achieved their highest growth rate of 5.6% since March 2021 to reach a three-year high of 4.8% market share.
Asda again recorded a year-on-year drop in sales, this time by 2.6%, while Co-op sales were down 1.6%.
