Fresh Produce Value Takes Centre Stage As Retail Growth Slows

New retail figures show subdued spending growth despite improving consumer confidence, as M&S cuts organic fruit and vegetable prices.

Britain’s food retailers are navigating an uneven consumer recovery, with new figures showing modest sales growth as households weigh grocery spending against mounting financial pressures.

The BRC-KPMG Retail Sales Monitor, published on 8 September, showed total UK retail sales increased by 0.7 per cent year on year in August. Food sales rose by 2.6 per cent, below their 12-month average growth of 3.2 per cent, while non-food sales fell by 0.8 per cent.

Harvir Dhillon, lead economist at the British Retail Consortium, said rising household bills were prompting shoppers to tighten their budgets. He called for action on business rates and energy costs to support retail investment and value for consumers.

Sarah Bradbury, chief executive of IGD, said grocery sales and volumes were both higher than a year earlier, but shoppers were increasingly considering other financial pressures, including energy bills and potential tax or benefit changes ahead of the Autumn Budget.

The spending figures follow an improvement in consumer sentiment. GfK’s survey, published on 21 August, recorded a three-point rise in its confidence index to minus 14, the highest level for two years.

Expectations for personal finances over the coming year improved, while the measure of the UK’s economic outlook also strengthened. However, the latter remained negative at minus 23, showing that greater optimism had not removed concerns about the wider economy.

Against that backdrop, M&S has announced investment exceeding £4 million to lower prices on more than 50 organic products, including fresh fruit and vegetables.

M&S says the initiative is intended to attract customers to organic food and encourage more frequent shopping, as it pursues an ambition to double its share of the organic market. M&S announcement

Taken together, the developments suggest that affordability remains central to the opportunity for fresh produce retailers, even as confidence improves.