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How have rising prices affected food and non-food retail sales in the UK?

ONS explores trends in the latest retail prices

Food retail sales trends

The volume of sales for stores that predominantly sell food has been relatively flat over the last eight years, with a gradual downward trend between 2009 and 2012. This is shown in Figure 1. The occasional spikes seen in individual months are due to one-off factors, such as the heat waves in June/July 2006 and July 2013. However, the value of sales has increased rapidly, particularly during 2008 and since 2010. This reflects rising prices, as illustrated by the implied deflator. Increases in the price of staple crops, such as wheat, have been the main driver of inflation in food stores.

Figure 1: Sales at predominantly food stores by volume and value, seasonally adjusted

Figure 1: Sales at predominantly food stores by volume and value, seasonally adjusted

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Non-food retails sales trends

The equivalent data for non-food stores is shown in Figure 2. During the period from 2005 to 2007, sales increased in both volume and value, and prices fell slightly. Sales then fell in both value and volume terms in 2008 and the first part of 2009, with prices generally continuing to fall. The volume of sales then gradually increased through 2009 and 2010. The exception to this was a sharp decrease in January 2010, when heavy snow and an increase in VAT affected sales. Decreasing volumes were also seen in the first half of 2011, but volumes increased thereafter. Prices broadly increased slowly during the period, with some short-term volatility.

Figure 2: Sales at predominantly non-food stores by volume and value, seasonally adjusted

Figure 2: Sales at predominantly non-food stores by volume and value, seasonally adjusted

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Retail sales by commodity

Supermarket chains are by far the largest retailers in the food sector, but also sell many non-food items. Furthermore, some non-food stores also sell food. To account for this, retail sales data are also calculated by commodity type, accounting for 30 retailers (including non-store retailers) selling a given commodity. Figure 6 compares the year-on-year growth (non-seasonally adjusted) in food, drink and tobacco with the equivalent pattern for household goods.

Sales of food, drink and tobacco by value have consistently increased year-on-year. However, household goods sales fell sharply during 2008, and again in 2011, before returning to growth. Much of this reflects food price inflation; as food is a necessity, rising food prices have not led to a substantial decrease in food sale volumes. Instead, more money has to be spent on food, reducing the disposable income available for discretionary non-food purchases. Household goods sales are particularly vulnerable to low consumer confidence, as they typically represent large purchases, and the decreases in 2008 and 2011 coincide with troughs in consumer confidence.

Figure 3: Year-on-year change in sales by value, food drink & tobacco and household goods

Figure 3: Year-on-year change in sales by value, food drink & tobacco and household goods

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Categories: Economy, National Accounts, National Income, Expenditure and Output
Content from the Office for National Statistics.
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