UK inflation fell more than expected in November 2025, with the Consumer Prices Index (CPI) dropping to 3.2% from 3.6% in October, largely driven by softer food price growth. While consumers remain financially constrained, the easing inflation rate may lead to a gradual return of confidence and increased spending in the food and beverages (F&B) sector, with shoppers expected to be more responsive to value and enhanced quality propositions, says GlobalData, a leading intelligence and productivity platform.
The Office for National Statistics (ONS) reported food inflation eased to 4.2% year-on-year (from 4.9%), while month-on-month food prices declined 0.2%—a sharp contrast to a 0.5% rise in the same month last year.
Unusually for the season, prices fell for bread and cereals (including cakes, biscuits, and breakfast cereals), as well as confectionery, dairy, and sugar, with early Black Friday and pre-Christmas discounts likely amplifying the drop. Several factors contributed, including easing input costs, retail promotions, and broader core inflation trends.
As inflation decreases, promotional activities are expected to rebound. However, brands must be cautious, as excessive promotions can erode margins without guaranteeing sustained volume increases.
Mark Jephcott, Associate Consumer Analyst at GlobalData, comments: “This is not a ‘back to normal’ moment; it is more like a recalibration. Shoppers remain financially constrained, but as inflationary pressures ease, they are likely to become more selective—rewarding products that justify their price through quality, format, and clear benefits, while still using promotions to manage budgets. Consumer sentiment supports the view that quality is now central to value, not separate from it.”
A strategic approach to promotions, focusing on value through quality rather than deep discounts, will enhance perceived value while protecting reference prices, a proposition that UK consumers are likely to support.
GlobalData’s Q3 2025 UK consumer survey* indicates that across all food and beverage categories surveyed, consumers prioritize “High quality products/ingredients”, ahead of “Low price/cheap”, and “Discounted/ on promotion”. In non-alcoholic drinks, the split was 29% for “high-quality products”, 26% for “low price”, and 20% for “discounted”. Similarly, in the bakery, cereals, and morning goods category, the responses were 41%, 23% and 19% respectively.
While the survey findings highlight an opportunity for brands to promote higher-quality product offerings, shoppers will continue to prioritize deals, mindful of the connection between pack sizes and price points. Brands considering a ‘shrinkflation’ strategy need to be aware of consumer negativity to diminished perceived value at a time of financial strain, which could increase their willingness to switch to competitors or private label.
The competitive threat from private label products may intensify if branded prices remain elevated while inflation cools, especially as a significant number of consumers think that “store’s own brand” quality is high. When considering why consumers choose “store’s own brand” products instead of brand, according to GlobalData’s Q2 2025 UK consumer survey*, 73% of UK consumers say that “store’s own brand” products are more affordable/cheaper. However, one in five UK consumers (21%), affirmed that “store’s own brand” products are better quality than brands, which could weaken brand loyalty amongst this group.
Jephcott adds: “With inflation easing, brands have an opportunity to regain momentum by leading with quality-led value—positioning premium attributes clearly, while using targeted, margin-smart promotions to support price points rather than relying on deep discounting. At the same time, brands should avoid tactics that dilute perceived value (such as shrinkflation) and instead reinvest any cost relief into product improvement and strengthen retailer partnerships to defend share against competitors and private label.”
* GlobalData’s Q2 and Q3 2025 UK consumer surveys each include responses from over 500 people
