Grocery inflation in the U.K. jumped 4.1 percent in May, reaching its highest level since February 2024, according to new data from research firm Kantar.
During the same time frame, the British Retail Consortium (BRC) also reported a 2.8 percent hike in food inflation compared to last May, which is slightly above the three-month average of 2.6 percent.
“This latest jump in grocery price inflation takes us into new territory for 2025,” Kantar Head of Retail and Consumer Insight Fraser McKevitt said in a press release.
May marked the fourth consecutive month that food inflation rose in the U.K., according to BRC CEO Helen Dickinson.
“Fresh foods were the main driver, and red meat eaters may have noticed their steak got a little more expensive as wholesale beef prices increased,” she said.
Nevertheless, take-home grocery sales grew by 4.4 percent over the four weeks to 18 May compared with last year.
McKevitt said that the year-over year spike was driven by households that have been adapting their buying habits to manage budgets for some time.
To that point, many consumers are continuing to seek promotions to get the best value, as spending on deals jumped up 5 percent this May compared to May 2024.
“Trimming prices remains the most popular way for retailers to draw in customers, with 80 percent of promotional spending this period down to straightforward price cuts,” McKevitt said.
Besides consumers getting creative in ways to find value, grocery sales are also increasing in part due to the “hottest ever start to May” temperature-wise, according to Kantar.
“We’ve been firing up the barbecues a bit earlier than last year, with chilled burgers flying off the shelves and sales growing by 27 percent,” McKevitt said.
However, he warned that those gains may start to wane.
“We typically see changes in behavior once inflation tips beyond the 3 percent to 4 percent point as people notice the impact on their wallets more,” McKevitt said.
Grocers’ own-label lines are “ones to watch, with premium own-label in particular being the fastest-growing part of the market since September 2023,” he said.
Regarding other prices in May, non-food prices remained in deflation, Dickinson noted, and ambient food prices decreased to 3.3 percent in May.
Despite concerns about inflation, U.K. retail chains recently got a boost in the form of an E.U.-U.K. bilateral agreement that grocery executives have said should result in lower prices and help boost seafood exports.
“Sweeping away trade barriers with the E.U. will remove cost, complexity, and delay in food imports from the continent,” Morrisons CEO Rami Baitiéh said.
