Over the past five years, most of the UK grocery sector’s reported growth has been driven by price inflation rather than real increases in volume, meaning consumers are largely paying more for the same baskets of goods.

A structural gap between food price inflation (+38.6%) and wage growth (~28%) has eroded purchasing power, forcing consumers to adapt their behaviour in ways that are now becoming permanent.

The industry has moved into a “volume reckoning” phase, where cumulative price increases are now leading to declining volumes, increased price sensitivity, and a growing shift toward private label and discounters.

Private label has become a structural competitor rather than a temporary substitute, now accounting for over 50% of grocery sales and significantly squeezing mainstream brands.

Most large FMCG brands are experiencing a disconnect between value and volume, with many still growing revenue while actually losing units, indicating underlying demand weakness.

Only a small minority of brands (17/100) are successfully growing both value and volume, typically by expanding categories, attracting new consumers, and carefully managing their price-value equation.

The brands that are winning tend to operate in growing demand spaces, execute strongly on brand relevance and distribution, and avoid over-reliance on price increases by maintaining accessibility.

Many companies are struggling because they have over-relied on revenue growth management (RGM) and pricing strategies, leading to weaker innovation, reduced brand investment, and widening price gaps versus private label.

The traditional “middle” segment is under the greatest pressure, as it lacks the differentiation to justify premium pricing while also being undercut by improved value-tier alternatives.

Future growth will need to come from rebuilding volume through better price architecture, stronger brand equity, category-expanding innovation, and a clear focus on driving real consumer demand rather than price-led revenue.