The Office for National Statistics has announced the final decision for the introduction of supermarket scanner data into consumer inflation statistics, bringing a step change in the measurement of consumer prices.
For a number of years ONS has been developing and trialling the use of supermarket checkout and online sales data to replace physical price collection for our headline inflation statistics.
As explained by Mike Hardie, Deputy Director for Prices Transformation, this process involves replacing 25,000 monthly price points, recorded on mobile devices in shops by price collectors, with 300 million price points derived from sales of over a billion units of products per month taken directly from checkouts.
"This new data source will bring a step change in our measurement of inflation. Now, rather than assuming the change in the price of one type of apple in a supermarket reflects all apples, for the shops supplying us with scanner data, we will be able to see how the price of every apple changes as well as knowing exactly how much of each type of apple is bought, so can adjust the figures for changing buying habits.
"However, it’s important to note we won’t have any information about any individual shopper," Hadie added.
The new process will also allow ONS to better capture the impact of a wider range of promotions, such as store discount cards, on average price inflation. This means the price charged at the till, not the price shown on the shelf, will feed into the inflation statistics.
"We will be bringing in this new data source in March, alongside our usual annual review of the basket of goods and services, when it will replace physical price collection for half of the grocery market.
"While this will significantly improve our understanding of price changes in the grocery market, overall, our analysis shows that on average it has little overall change on headline inflation over the six year period where we have data.
"We have assessed the impact of this improvement from 2019 to 2025, a historically volatile period for inflation which included both the Covid-19 pandemic and the initial impact of the war in Ukraine," Hardie said.
Following the introduction of this new data source, we will also reintroduce our Shopping Prices Comparison Tool, but on an expanded basis, showing more products and calculated on many more price points. ONS will allow the new data to bed in first, so plan to reintroduce the tool from the summer.