British shoppers saw some relief from rising grocery costs in January as supermarkets ramped up promotions, leading to a slight decline in food price inflation after four consecutive months of

increases, according to industry data released on Tuesday.

Market research firm Kantar reported that annual grocery price inflation dropped to 3.3% in the four weeks leading up to January 26, down from 3.7% in the previous month. Meanwhile, total sales increased by 4.3% compared to the same period last year.

The decline in inflation was largely driven by a surge in supermarket promotions, which increased by £274 million ($340 million) year-on-year. These discounts accounted for 27.2% of total sales, marking the highest level of January promotions since 2021.

Kantar highlighted that prices have been rising fastest in categories such as chocolate confectionery, chilled smoothies, juices, butter, and spreads. In contrast, prices have fallen most significantly in cooking sauces, household paper products, and cat food.

Despite the recent dip in food inflation, supermarkets have cautioned that upcoming tax increases in the Labour government’s first budget in October, alongside a further rise in the national minimum wage, could drive inflation higher again.

The Institute of Grocery Distribution has projected that food inflation could climb to nearly 4.9% in 2025. Photo by Mtaylor848, Wikimedia commons.