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Sainsbury’s: Food inflation expected to keep easing through 2026 as grocery inflation cools

UK grocery inflation has shown further signs of slowing at the end of 2025, with Sainsbury’s saying it expects food inflation to continue falling through 2026.

Industry figures covering the four weeks to 28 December 2025put UK grocery inflation at 4.3%, easing from 4.7%in the previous four-week period. While price pressures remain elevated, the direction of travel will be welcomed by households still managing tight budgets.

Speaking following the retailer’s Christmas trading update, Sainsbury’s CEO Simon Roberts said the business expects food inflation to keep coming down in 2026. He pointed to a more stable commodity outlook and noted that while wages are still increasing, these are costs the business plans for over time.

Cooling prices — but costs remain “sticky”

For the food industry, easing inflation is not the same as returning to “normal” pricing. Businesses across retail, manufacturing and foodservice continue to manage a complex cost picture, with labour, logistics, compliance and investment requirements all playing a role in final shelf prices.

From 1 April 2026, the UK’s National Living Wage increases to £12.71 per hour— a 4.1%rise. For many employers, pay is only part of the labour-cost equation, with additional pressures coming from recruitment challenges, training requirements and productivity constraints.

The result is a familiar tension across the supply chain:

• consumers continue to demand sharp value,

• retailers compete hard on price and loyalty,

• suppliers seek sustainable margins to invest in capacity, standards and resilience.
  
  

Christmas trading highlights the “value + quality” split

Sainsbury’s Q3 trading statement (covering the 16 weeks to 3 January 2026) underlined how shoppers are splitting spend between value-led essentials and selected premium purchases.

The retailer reported strong grocery growth across the quarter and Christmas period, alongside weaker demand in some non-food categories. The update also highlighted continued momentum in premium own-label ranges and fresh food — a pattern that suggests shoppers are still prioritising quality on key lines, even while watching overall spend.

That mix matters. When inflation cools, shoppers do not automatically “spend freely” again — they often become more deliberate, switching between own-label tiers, shopping more frequently, and leaning into promotions. For the wider sector, that can mean volume and range shifts that are just as important as headline inflation.

What to watch next

If food inflation continues to ease through 2026, attention will likely turn to three questions:

1. How quickly does relief reach households?
   A slower inflation rate still means prices are rising — just more gradually.

2. Where does pressure re-emerge?
   Labour costs, operating costs and policy-related costs can offset commodity stability.

3. What does it mean for diet and access?
   Affordability remains central to food security outcomes, especially for lower-income households and communities already under strain.
   
   

The UK Food Council will continue to track price movement, cost drivers and how changes in grocery inflation translate into real-world affordability — not only for shoppers, but for the suppliers and food businesses that keep the system running.

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