Almost a third of goods at supermarkets are on promotion, according to industry data as a big question mark hangs over the sector heading into 2025.
Kantar Worldpanel, which monitors sales and prices among chains, reported that 30% of products were discounted ahead of the key shopping season.
Supermarkets traditionally attempt to lock in customer loyalty before their big Christmas shop.
Money latest: Cost of typical Christmas dinner rises sharply
Discounts are widely linked to loyalty schemes – recently given a clean bill of health by regulators.
Fraser McKevitt, Kantar’s head of retail and consumer insight, said: “Sales on promotion reached 30% in November, the highest since Christmas last year.
1:44 The Competition and Markets Authority’s George Lusty explains the findings of its loyalty pricing probe“It’s retailer price cuts, often accessed through loyalty cards, that are really driving this. While multibuy promotions have stayed flat, spending on price cut offers has grown by 14%, worth £355m more than last year.
More from Money“Shoppers are grabbing the chance to spend that little bit more than usual on Christmas specials, and champagne, wine and spirits saw the biggest levels of buying on deal.”
Kantar reported, however, a 6.5% increase on the cost of a typical Christmas dinner, with turkey and some traditional vegetables leading the way due to higher production costs.
2:05 HMV owner slams budget ‘burden’Wider grocery inflation, it said, remained flat at a level around 2.5%.
The promotional activity around the festive season tends to end early in the New Year.
There are fears that some poor harvests, high energy costs and other factors will place upwards pressure on food inflation during 2025.
The big question mark is hanging over the actions of the supermarkets themselves.
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The main industry body has already warned that the major employers face a huge additional bill due to measures in the budget.
Hikes to employer national insurance costs from April are expected to place the greatest burden on supermarkets.
While the UK industry is very competitive, chains will be under pressure to protect their profit margins and could yet pass on some of the costs to customers in the form of higher prices.
The British Retail Consortium has also warned that pay growth, investment and jobs could be hit.