(Bloomberg) -- Upmarket UK grocers Ocado Group Plc and Waitrose regained market share as easing inflation gave them room to offer discounts.

Ocado was the UK’s fastest-growing retailer in the 12 weeks to March 17, with sales up 9.5% from the same period last year, according to data published by research firm Kantar on Tuesday. Ocado and Waitrose, two favorites of the British middle classes, were the only grocers to gain market share in the past three months.

It comes as grocery price inflation in the period dropped to 4.5% — its lowest level since early 2022 — in a boost for shoppers still struggling with a generational cost-of-living crisis.

Waitrose introduced £30 million ($37.9 million) worth of price cuts last month, including on more than 200 own-brand items. Ocado is offering limited-time discounts for first-time shoppers, and free deliveries. 

Premium home label lines were a beneficiary as consumers sought cheaper products, seeing 16.1% growth overall — the fastest rate in almost three years — Kantar found. 

Waitrose also lowered prices in 2023, as it tries to keep up in the UK’s competitive grocery market, with surging competition from budget chains Aldi and Lidl.

The deals come as British markets compete to win over customers still on the hunt for value even as the cost-of-living crisis softens. Among those feeling the most pressured, 78% are buying cheaper groceries and 68% are using promotions manage their budgets, Kantar said. Despite grocery price inflation falling, some 23% of households continue to identify themselves as struggling financially, the data company said. 

“Despite this continued slowdown, many British households are still feeling the squeeze,” said Fraser McKevitt, Kantar’s head of retail and consumer insight. 

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