The British Retail Consortium (BRC) is expecting food inflation to reach over 4 percent in the U.K. by the second half of 2025 after grocery prices rose 2.1 percent in February year over year.
“Inflation will likely rise across the board as the year progresses with geopolitical tensions running high and the imminent GBP 7 billion [USD 9 billion, EUR 8.4 billion] increase in costs from the Autumn Budget and the poorly designed packaging levy arriving on the doorsteps of retailers,” BRC CEO Helen Dickinson said.
If the U.K. government intends to keep inflation at bay and help retailers grow, it “must mitigate the swath of costs facing the industry,” Dickinson said.
“It can start by ensuring no shop ends up paying more than they already do under the new business rate proposals and delaying the new packaging taxes,” she said.
Though inflation is expected to rise, the predicted totals come nowhere near the highs seen in 2023, when grocery inflation spiked to over 17 percent.
Still, this anticipated rise in food inflation comes at a time when more shoppers are looking for value, as items bought on offer accounted for 27.6 percent of all sales in February, marking an increase of 0.3 percentage points compared to last year, according to research firm Kantar. Discount retailers like Lidl and Aldi are also securing their highest U.K. grocery market shares, signaling that consumers are looking to save...
