Healthier options drive rise in supermarket sales in January

(Sharecast News) - Supermarket take-home sales rose 4.3% over the four weeks ended 26 January compared with the same period last year, according to fresh data from Kantar on Monday.

According to the consumer research organisation, shoppers benefited from a continued slowdown in grocery price inflation, which eased to 3.3% for the month.

Health-conscious spending shaped purchasing trends, with demand for fresh produce and low-alcohol drinks increasing.

Kantar said consumers spent £1.2bn on fresh fruit, vegetables, and salad in January, a significant £193m increase from December.

Sales of low and no-alcohol beverages were 7% higher than a year earlier, with 6.7% of households purchasing these alternatives.

Kantar said the data highlighted shifting consumer priorities in early 2025, with a focus on value-driven purchases and healthier food choices shaping grocery sector performance.

"Supermarkets were dishing out the discounts this New Year, and consumers responded," said Fraser McKevitt, head of retail and consumer insight at Kantar.

"Spending on promotions rose year-on-year by £274m, accounting for 27.2% of sales - the highest level in January since 2021."

McKevitt said people also turned to non-branded products to help keep costs down, with own label as a proportion of sales hitting a record high of 52.3% in January.

"Spending on supermarkets' own lines was up 5.4%, helped by consumers buying premium own label products in the couple of days leading up to New Year's Eve."

Retailers also boosted promotional activity, with discount-driven spending rising by £274m year-on-year, Kantar said.

Promotions accounted for 27.2% of total supermarket sales, reflecting efforts to attract cost-conscious consumers.

"Rolling into the new year, health tends to play a bigger role in our grocery choices," commented Nathan Ward, business unit director for usage and out-of-home at Kantar.

"Over a quarter of take-home food and drink in January is chosen with health at least partially in mind, as shoppers tell us they want to eat less processed food and feel the benefit of fibre and vitamins."

Lidl and Aldi continued their momentum in the competitive grocery sector.

Lidl's sales rose 7.4% over the 12-week period to 26 January, marking three consecutive years of growth and lifting its market share to 7.2%.

Aldi's sales meanwhile increased by 4.2%, bringing its share to 10.2%.

Ocado was the fastest-growing grocer for the ninth consecutive month, with spending at the online retailer rising 11.3%, boosting its market share to 1.9%.

Tesco saw the strongest market share gain among traditional supermarkets, reaching 28.5% - an increase of 0.7 percentage points from last year.

Sales at Britain's largest grocer climbed 5.6%, marking its fastest growth since April 2024.

Sainsbury's outpaced the overall market with a 4.2% rise in sales, increasing its share to 15.9%.

Morrisons and Asda held market shares of 8.6% and 12.6%, respectively.

Among smaller retailers, Co-op returned to growth with a 0.8% rise in sales, maintaining a 5.2% share.

Waitrose saw a 3.0% increase in sales, holding its 4.6% market share, while Iceland's sales edged up by 1.0%, keeping its share at 2.4%.

"It's no surprise to see the low and no alcohol trend make its mark in January, but given some of the generational splits we have seen in grocery, it's interesting that older shoppers are just as likely to take these products home as younger ones," added Fraser McKevitt.

"Not everyone signed up for dry January though, with 49% of people buying an alcoholic drink this month - but this is a pretty big drop from December's 76%."

Reporting by Josh White for Sharecast.com.