Explore how UK grocery sales, inflation and shopper confidence are reshaping retail, with insights on heatwave spending, value, premium and market share trends.
Grocery inflation falls again, but sales follow suit
The latest figures signal the UK grocery market entering a more stable phase after several years of increased inflation. Grocery sales growth slowed to 2.5% in the four weeks to 9th August 2026, while like-for-like (LFL) grocery inflation also eased to 2.1%. Although overall spending softened following the boost from the World Cup and hot weather, the decline in average spend suggests shoppers are feeling some relief from cost pressures rather than just cutting back on costs wherever possible. If inflation continues to stay moderate, retailers can focus less on keeping prices low and more on driving volume, loyalty, and innovation.
Worldpanel’s data states that financial confidence has reached its highest level since late 2021, and IGD’s shopper confidence index has also seen a slight upturn, if this confidence continues shoppers may be more willing to trade-up and explore premium ranges in stores. However, the pressure persists for some households, with one in five reporting that they’re struggling financially. This is likely to drive demand for both ends of retailer propositions catering to value and premium.
Promotional activity therefore remains significant in driving volumes, with a record number of sales including a deal this month at 31.1%, and premium private label also saw strong growth at 11.1%, highlighting how value still plays a significant role in shopper behaviour, but as confidence gradually improves shoppers are willing to buy more premium items.
Summer staples stay on top
August saw continued spells of hot weather, meaning shoppers continued to indulge in summer staples throughout the month. The strong growth in sales performance of dips, salads, chilled finger foods and frozen treats highlight the influence of the summer picnic occasion. Rather than preparing formal meals at home, shoppers were looking for products that were easy to take outside and share in a group. The increases in coleslaw, dips, chilled finger foods, chilled quiche, and olives all point to shoppers embracing the picnic or ‘picky bits’ occasion. Retailers are likely to place greater emphasis on products that support these occasions in the future, as shoppers appear to be prioritising convenience and flexibility when periods of hot weather and heatwaves arise, creating opportunities for retailers and suppliers to increase basket sizes on smaller, ready-to-serve foods.
The strong performance from frozen treats such as ice cream and sorbet can no doubt be attributed to the heatwaves. While the heat put pressure on freezers and chillers, the demand for frozen and chilled products such as ice cream and soft drinks was significant in August. The ability for supply chains and retailers to have flexibility and speed in improving access to these ranges is imperative for summer, as demand shifts quickly based on weather events. Frozen treats and chilled soft drinks will likely continue to benefit from the summer season as a respite for shoppers from the hot weather.
M&S’s grocery only sales maintain fastest growth rate
For the second month in a row, M&S’ grocery only sales saw incredible growth at 15.9% in the 12 weeks to 9th August 2026, only a slight decrease from last months reported 16%. This incredible growth can be attributed to multiple areas of investment such as new stores, refurbished stores, its continuous NPD, or even its push on value.
Ocado has again sustained top position in growth when it comes to grocers only, with sales up 13.1%, and also saw a 0.2% increase in its market share to reach 2.1%.
Lidl gained a significant amount of share points this period, increasing by 0.5% to reach 8.8%, well clear of Morrisons who they only overtook in May. Lidl’s sales increased by 8.5%.
Asda can see the light at the end of the tunnel, getting very close to reaching positive sales growth for this period at -0.2%. They maintain a strong third place in market share at 11.5%.
Sainsbury’s and Morrisons both gained 0.1% market share to reach 15.2% and 8.5% respectively. Sainsbury’s saw a sales growth of 3.5%, while Morrisons growth was at 3.3%.
Tesco’s market share dipped by 0.1% this period but still hold a firm top position at 27.8%. Sales at the UK’s largest grocer grew 1.8%, once again behind the market.
Co-op reached their highest market share since September 2025 at 5.5% boosted by a sales growth of 5.1%.
Aldi holds a 10.7% market share, with sales growth improving this period to reach 1.1%, however this is still behind the market.
Waitrose and Iceland’s shares remained the same at 4.5% and 2.3% respectively. Iceland saw a sales growth of 2.4%, its highest since February, and Waitrose saw a sales growth of 2.8%, marking a better performance than last period.
Key takeaways
Key takeaways for retailers and suppliers lies in taking a closer look at how weather driven demand can be captured. Premium own label returning to double digit growth, as well as the continued strength of promotional sales, shows that shoppers are willing to trade up selectively. The strength of picnic foods, soft drinks, and frozen teats shows retailers and suppliers that investment in these areas with innovation and promotion can see incredible results come summer 2027. Another significant shift this period is the incredible rebound growth of Co-op, who bolstered their share position with an increase of 0.4% in the last three months, definitely a retailer to keep an eye on.