The Office for National Statistics (ONS) is implementing a groundbreaking overhaul of the UK's inflation measurement methodology, marking the first major revision in decades. From next month, the statistical body will fundamentally change how it calculates the Consumer Prices Index by integrating vast quantities of supermarket scanner and online sales data.
A Data-Driven Transformation
This revolutionary approach will see the ONS utilise information from more than a billion supermarket checkout transactions and digital sales records, effectively replacing traditional manual price collection methods. The shift represents a significant technological advancement in economic measurement, allowing statisticians to capture real-time pricing dynamics across the retail sector with unprecedented precision.
Enhanced Accuracy and Scope
Mike Hardie, deputy director for prices transformation at the ONS, explained the substantial benefits of this new methodology. "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," he stated in an online announcement.
The integration of scanner data will enable the ONS to more accurately account for promotional activities and loyalty card discounts, which have previously been challenging to incorporate into inflation calculations. This addresses a longstanding gap in measurement, as numerous supermarkets offer substantial discounts through loyalty schemes that aren't reflected in standard shelf prices.
Reducing Measurement Volatility
Alongside the supermarket data initiative, the ONS is implementing complementary improvements to reduce price volatility in the inflation figures. The statistical body will double its sampling for hotel accommodation by adding an extra collection day each month, specifically designed to mitigate the impact of large entertainment events on price measurements.
Analysis conducted by the ONS has demonstrated that incorporating grocery scanner data reduced consumer price inflation by an average of 0.03 percentage points between January 2019 and June 2025. Furthermore, according to Financial Times reporting, supermarket scanner data altered the headline inflation rate by at least 0.1 percentage points in more than half of the months since 2020.
Broader Methodology Improvements
The transformation extends beyond retail measurement, with the ONS announcing additional refinements to how it samples overnight hotel stays and computer game prices. These methodological enhancements are all part of a comprehensive strategy to improve the quality and reliability of the UK's key economic statistics.
"Analysis shows that both these improvements will lead to less volatility in overall inflation," confirmed Mr Hardie, emphasising the systematic nature of these changes. Although the rollout of the scanner data feature arrives approximately one year later than originally planned, it represents a crucial step forward in modernising the nation's statistical infrastructure.
These coordinated amendments form part of an important ongoing effort to ensure that UK inflation measurements accurately reflect contemporary shopping behaviours and pricing structures, providing policymakers, businesses, and the public with more reliable economic indicators for informed decision-making.
