Key facts
- Grocery price inflation rose to 4.3% in the four weeks to February 22.
- This is an increase from 4% in January and follows four months of easing.
- Chocolate prices were 9.3% higher year on year.
- Sales of pre-made pancake mixes jumped 114% in the week before Shrove Tuesday.
- Online grocery sales accounted for 13% of total grocery sales, the highest share since July 2021.
- Ocado sales were up 15.1%, Lidl sales up 10%, and Tesco sales up 4.5%.
Grocery price inflation in the UK has risen again to 4.3% in the four weeks ending February 22, reversing a trend of easing food price growth seen over the previous four months. This uptick has raised concerns about the ongoing cost of living pressures for shoppers.
Economists suggest that global energy market jitters, stemming from Middle East tensions, could exacerbate inflation. Philip Lane, chief economist at the European Central Bank, warned that a prolonged conflict could disrupt oil and gas supplies, potentially leading to a "substantial spike" in inflation and a "sharp drop in output" across the eurozone. Such a rise in energy costs could spill over into the UK, increasing petrol prices and household utility bills, and consequently adding fresh cost pressures for food producers and retailers.
Shoppers are already noticing price hikes in specific categories, with chocolate prices remaining 9.3% higher year on year, though inflation in this category is easing. Seasonal events saw significant sales boosts, with pre-made pancake mixes jumping 114% and key ingredients for homemade pancakes costing 42p more. Valentine's Day spending also saw a surge in premium meal deals.
In terms of retail performance, bakery chain Greggs noted "easing inflationary pressures" despite a drop in pre-tax profits. Online grocery shopping continues its growth trajectory, accounting for 13% of total sales, the highest share since July 2021. Ocado emerged as the fastest-growing grocer, followed by Lidl and Tesco, which also reported sales increases and market share gains.