Grocery sales at UK supermarkets slowed month on month in March 2025 as shoppers remained cautious about stubborn food inflation, NielsenIQ data suggests.
Total till sales in the four weeks to March 23, 2025 rose 2.7%, down from 4% in February. Categories such as confectionery and alcohol were particularly impacted as the month’s major celebration, Mother’s Day, fell on a later date than last year (March 30, 2025 versus March 10, 2024).
Food inflation – which remained unchanged at 3.3% in March – is another likely culprit for consumers’ delayed spending ahead of Easter, which falls on April 20 this year (2024: March 31).
Year over year, spending decreased according to the data, with households now shelling out £19.10 ($24.57) per visit, down 3.4%.
British consumers have also reduced their online grocery shopping purchases, with this channel’s market share now at 12.9% compared to 13.2% in 2024. In-store visits meanwhile have increased 6.8% year over year, as consumers look to bag a bargain.
Category data: Dairy up, beer down
In 2024, both Mother’s Day and Easter fell in March – but this year, Mother’s Day (March 30) was the only major celebration on the calendar, which impacted spending, Nielsen thinks.
For example, sales of beer, wine and spirits fell -4.3% in the four weeks to March 23 as shoppers left it late to make Mother’s Day arrangements.
Confectionery sales also slumped, in double-digit terms (-16.7%), due to Easter falling in April and the late scheduling of Mother’s Day in March.
But staple food items such as dairy (+7.2%) and meat, fish and poultry (+5.9%) increased in both volume and pricing terms in the four-week period to March 23.
Within dairy, the sub-categories of eggs, yogurt and creams drove the growth.
“The +7.2% value growth in Dairy supercategory in recent weeks was driven by double digit growth in eggs (+13.4%) in part linked to inflation but also yogurts (+11.9%) and creams/custards (+10.3% ),” an NIQ spokesperson told us.
“In all three categories there was also unit growth as shoppers put more items into their supermarket basket, with eggs +2.4%; yogurts +8.3%, and creams/custards, +0.7%.”
Mike Watkins, head of retailer and business insight at NIQ, added: “Shopping behaviour continues to evolve, with consumers increasingly shopping around for the best prices and offers whilst looking to stretch budgets ahead of planned rises to essential bills at the start of April.
“This could be helping Discounters capture a greater share of the regular weekly shop. The channel now holds an 18.1% share of all FMCG sales in Q1 – the highest in over two years – with an average spend per visit of £24.09 ($30.94).”
Watkins concluded: “Looking ahead, retailers have reasons to be optimistic this dip in sales won’t last.
“Sunnier weather at the start of April and the lead up to Easter will encourage extra spend which will then improve topline sales. We expect all retailers to keep an eye on the favourable start of spring.”
$9bn worth of new costs ‘impossible to absorb’
Despite NIQ’s positive predictions for April, retailers in Britain are likely to be on edge at the start of the new financial year due to growing costs as a result of a higher National Living Wage and changes to employer national insurance contributions.
Together, these would cost the industry in excess of £5bn, rising to £7bn (around $9bn) with the introduction of new EPR regulations in October 2025, according to The British Retail Consortium (BRC), which represents UK retail.
The UK government has made changes to the insurance contribution threshold, reducing it from £9,100 to £5,000, which means that more part-time and entry-level jobs will now be captured by the tax. This would push the cost of entry-level by 10% in the new financial year, the BRC estimates.
Kris Hamer, director of insight at the trade organization, warned that it would be ‘impossible’ for businesses to cope with the new costs.
“Retail operates on tight margins and it would be impossible to absorb all £5bn of new costs which hit the industry in April. Food inflation has jumped significantly in recent months and is forecast to hit 5% by the end of 2025 as a result of the costs arising from the Budget. On top of this, retailers are still burdened by an outdated business rates system."
“It is vital that the government’s reform of business rates doesn’t impose additional costs onto retailers. Reform must leave no shop paying more,” Hamer concluded.
