U.K. grocery inflation continues to rise, and experts are saying that without relief from several pressures affecting the industry, there is no end in sight.
Food and non-alcoholic drink inflation climbed 4.9 percent in July 2025 compared to July 2024, which was the highest rate since February 2024, according to the Food and Drink Federation (FDF). At its highest point during the month, inflation reached 5.2 percent, according to Worldpanel by Numerator data.
Food and drink manufacturers are being “squeezed on all sides,” FDF Director of Corporate Affairs and Packaging Jim Bligh said.
“Energy prices remain high, and the cost of some key ingredients has surged in recent years. With high commodity prices, the new GBP 1.4 billion [USD 1.9 billion, EUR 1.6 billion] packaging tax, and increased National Insurance costs, it’s no surprise that many food and drink manufacturers have seen their costs increase by 10 percent or more this year.”
Bligh further warned that while manufacturers have absorbed as many of the increased costs as possible, consumers are likely to soon see higher prices at the till.
“We expect that high food and drink inflation will persist through the year, so any fresh costs for businesses in the Autumn Budget will inevitably put yet more pressure on shoppers' pockets,” he said.
NielsenIQ Head of Retailer and Business Insight Mike Watkins said that governmental pressure was not the only reason for uptick in prices. He said that inflation has also been driven by global supply costs, seasonal food inflation driven by weather conditions, the conclusion of promotional activity linked to recent sporting events, and a rise in underlying operational costs.
“As shoppers return from their summer holidays, many may need to reassess household budgets in response to rising household bills,” he noted.
Categories that saw the highest inflation in July, according to FDF, included beef and veal (24.3 percent), coffee (18 percent), butter (17.8 percent), chocolate (17.2 percent), and whole milk (11.3 percent).
On the other hand, prices fell for olive oil (-10.6 percent), sugar (-2.8 percent), frozen seafood (-2.6 percent), and rice (-2.5 percent).
Shoppers are making a variety of efforts to save on food costs. In addition to preparing more meals at home and buying more private-label products, Britons are visiting restaurants less often.
Casual and fast-service restaurants have especially seen a decline in visitors, with trips falling by 6 percent during the three months to mid-July 2025 compared to last year, according to Worldpanel Head of Retail and Consumer Insight Fraser McKevitt.
Additionally, consumers are shopping more at discount stores.
In fact, Lidl and Ocado tied for the top spot as the fastest-growing grocers for the 12 weeks to 10 August, Worldpanel said, with sales at both retailers hiking up 10.7 percent compared to the same period last year. Sales at Aldi rose 4.8 percent, and it now holds a 10.8 percent share of the overall grocery market, according to Worldpanel.
Lidl was the least expensive supermarket in July, beating Aldi for the first time in 20 months. It charged GBP 128.40 (USD 172, EUR 148) on average for a shopping list of 76 branded and own-label groceries.
For traditional supermarkets, Asda sported the least expensive groceries in July at GBP 139.53 (USD 187, EUR 161) per trip. On the other hand, Waitrose was the most expensive supermarket at GBP 170.91 (USD 229, EUR 198) per trip during the period.
