Food & Drink sector performance – January 2023

At first glance, food and drink sales in January look uncharacteristically strong, but in fact the typical slow start to the year has been heavily disguised by a big dose of inflation. After a slightly more buoyant December, it’s clear that volumes fell in January as shoppers put the post-festive brakes on their spending.

However, there are glimmers of hope, with shoppers starting the year in a more upbeat mood and our Shopper Confidence Index improving to its highest level in a year. With the Prime Minister pledging to half inflation this year, coupled with our prediction that food inflation will slow this year, just 33% of shoppers expect food prices to get much more expensive compared to 53% last August. Furthermore, fewer food shoppers expect to increase their focus on saving money in the year ahead (35% vs 47% Oct’22). Shoppers are starting to benefit from lower petrol prices, and many are already adopting savvy shopping tactics like buying fewer products, making fewer trips, and only visiting certain supermarket aisles.

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