Report Summary

Period covered: 01 March - 04 April 2026

3 minute read

Note: This report summary is one or two months behind the current month as standard reporting practice. The content is indicative only and incomplete with certain data undisclosed. Become a member to access this data or take out a free 30 day membership trial now.

Food & Grocery Sales

Food and grocery sales rose by xx% year-on-year in March, accelerating sharply from the xx% increase recorded in the same month last year.

Headline growth was elevated by seasonal timing effects, with the earlier Easter period pulling forward spending into March and boosting category performance.

Key drivers and category performance

March performance was heavily influenced by calendar effects. The earlier Easter period brought forward a significant portion of seasonal food spend, including confectionery, premium ranges and entertaining categories, into the March trading window. Mother’s Day also provided a further lift, particularly across gifting and premium food lines.

This resulted in a headline growth rate that overstates the underlying trajectory. Once timing effects are stripped out, demand remains steady, with volumes broadly supported but still sensitive to price pressures.

Consumer behaviour continues to shift in a more defensive direction. Worldpanel reports that over 60% of consumers are very or extremely concerned about grocery prices, which is feeding into a more deliberate shopping approach, combining trading down in staple categories with selective spend on premium lines tied to specific occasions.

Promotional activity remains a central driver across the sector. NIQ data suggests that promotional participation remains elevated, with a growing share of volume sold on deal as retailers compete to retain price-sensitive shoppers.

At the same time, own-label continues to gain traction as consumers seek clearer value, particularly across ambient and fresh staple categories.

Retailer dynamics remain highly competitive and increasingly polarised. Worldpanel’s 12-week data shows discounters continuing to outperform, with Lidl sales up xx% and Aldi maintaining share at over xx%. Tesco and Sainsbury’s both delivered sales growth above xx% through a combination of price investment and loyalty-led engagement.

Ocado remained the fastest-growing grocer overall, with sales up xx%, highlighting the continued strength of online grocery.

Food price surge?

The near-term outlook for food and grocery is expected to soften following March’s elevated performance. The timing of Easter will reverse in April, creating a weaker comparative and a likely slowdown in headline growth. March should therefore be treated as an inflated reading and not a sign of renewed volume momentum.

Underlying demand is expected to remain stable, supported by the essential nature of the category, but the quality of growth is likely to weaken if food inflation continues to move higher.

Food inflation has already edged back up, with renewed pressure in categories such as confectionery, meat, soft drinks and coffee. If energy and commodity costs continue to rise following the escalation of conflict in the Middle East, these pressures are likely to feed into transport, packaging, and production costs over the coming months.

This creates a more difficult environment for households. Consumers had begun to benefit from easing inflation earlier in the year, but that relief now looks less secure. Any sustained rise in fuel and food prices will reduce discretionary headroom and push grocery shoppers back towards stricter budget management.

This is likely to increase reliance on own-label, entry-tier ranges, meal planning and promotional purchasing. Basket sizes may become more controlled, with shoppers cutting back on impulse additions and discretionary food treats outside key occasions.

Higher-income households should continue to support premium meal deals, fresh prepared foods and selective trade-up moments around events and entertaining. Lower- and middle-income households are more likely to reduce frequency of higher-value purchases, switch brands, buy smaller pack sizes or move more spend towards discounters.

Retailers are likely to maintain an aggressive stance on price. The major supermarkets will continue to use loyalty pricing, price matching and own-label investment to defend share, while discounters should benefit if grocery anxiety intensifies. Tesco’s recent expansion of its Everyday Low Prices platform and wider price investment across thousands of lines shows how competitive the market is becoming. This will support volumes, but margins will remain under strain as retailers absorb some cost pressure to protect customer perception.

The main risk for the second quarter is that rising energy and food costs trigger a return to more defensive grocery behaviour just as the Easter boost unwinds. Growth will remain positive in value terms, but significant volume recovery is unlikely until inflation pressure eases and real incomes feel more secure. The coming months will test how far consumers can absorb renewed price pressure before cutting back further on quantity, quality or choice.

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UK Grocery Market Share (12 weeks to 22 March)