U.K. food inflation remained steady at 3.3 percent in February, and seafood realized slight deflation, but retailers are still concerned about a spike in prices this year.
The Office of National Statistics reported that the overall Consumer Prices Index (CPI) rose by 2.8 percent in February 2025 compared to February 2024, but declined slightly from 3 percent in January versus January 2024. Grocery research firm Kantar also found that overall grocery inflation rose 2.1 percent in February, while fish prices fell by 0.7 percent.
Despite the somewhat positive inflation news, food inflation has jumped significantly in recent months and is forecast to hit 5 percent by the end of 2025 as a result of the costs arising from the Autumn Budget, British Retail Consortium Director of Insight Kris Hamer said.
“Retail operates on tight margins and it would be impossible to absorb all GBP 5 billion (USD 6.5 billion, EUR 6 billion) of new costs which hit the industry in April. On top of this, retailers are still burdened by an outdated business rates system. It is vital that the government’s reform of business rates doesn’t impose additional costs onto retailers,” Hamer added.
The cost increases Hamer mentioned include an increase to the National Insurance contributions, which seafood processors have opposed citing a financial burden on employers. That increase, coupled with an increase in the minimum wage, higher business tax rates, and more will cost the sector billions...
