In March 2025, grocery sales at UK supermarkets experienced a slowdown compared to the previous month, according to data from NielsenIQ. The total till sales for the four weeks leading up to March 23, 2025, saw a 2.7% increase, down from 4% in February. This deceleration in sales was attributed to consumers’ cautious approach towards persistent food inflation. Categories such as confectionery and alcohol were particularly affected, with the timing of major celebrations like Mother’s Day falling later in the month compared to the previous year.
Food inflation remained steady at 3.3% in March, further contributing to consumers delaying their spending ahead of Easter, which was scheduled for April 20 in 2025. Year over year, household spending decreased, with an average expenditure of £19.10 ($24.57) per visit, marking a 3.4% decline. Additionally, online grocery shopping purchases decreased, with a market share of 12.9% compared to 13.2% in 2024. In contrast, in-store visits increased by 6.8% year over year as consumers sought bargains.
Category data revealed a mixed trend, with dairy products showing growth while beer sales declined. The dairy category saw a substantial increase of 7.2%, driven by staple items such as eggs, yogurt, and creams. In contrast, sales of beer, wine, and spirits fell by 4.3% as consumers delayed purchases for Mother’s Day. Confectionery sales also took a hit, dropping by 16.7% due to the later timing of Easter and Mother’s Day.
Mike Watkins, head of retailer and business insight at NielsenIQ, highlighted the evolving shopping behavior of consumers, emphasizing their focus on seeking the best prices and offers to manage budget constraints. Discount retailers captured a larger share of the market, with an 18.1% share of all FMCG sales in Q1. Watkins expressed optimism for an improvement in sales with the arrival of sunnier weather and the lead-up to Easter.
However, despite the positive outlook for April, retailers in Britain faced challenges at the start of the new financial year. Rising costs, including a higher National Living Wage and changes to employer national insurance contributions, posed a significant burden on the industry. The introduction of new Extended Producer Responsibility (EPR) regulations in October 2025 was expected to escalate costs further, reaching an estimated £9bn.
The British Retail Consortium (BRC) warned that absorbing these new costs would be impossible for businesses operating on thin margins. Kris Hamer, director of insight at the BRC, highlighted the impact of the reduced insurance contribution threshold and the potential 10% increase in entry-level job costs. He called for government support to prevent additional financial strain on retailers, particularly in the face of rising food inflation and ongoing challenges related to outdated business rates.
In conclusion, while the short-term sales slowdown in March posed challenges for UK supermarkets, there were positive indicators for a potential recovery in the coming months. Retailers, however, faced a daunting task of managing escalating costs and navigating regulatory changes to sustain their operations effectively. Adapting to evolving consumer behavior and economic conditions would be crucial for retailers to thrive in a competitive market landscape.
