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Rising food costs push shop prices back into inflation

Rising food prices in UK grocery stores amid June 2025 inflation
iStock image for representation
  • Shop price inflation climbed to 0.4 per cent in June, led by surging food costs.
  • Food inflation hit 3.7 per cent, with fresh and ambient categories both seeing sharp increases.
  • Wage hikes, NI costs, and climate impacts blamed.

  • Monthly shop price inflation rose in June for the first time since July last year, driven by higher food prices as businesses passed on rising employment costs to shoppers.


    According to industry data released by British Retail Consortium (BRC) today (July 1), shop price inflation increased to 0.4 per cent year on year in June, against a decline of -0.1 per cent in May. This is above the 3-month average of 0.1 per cent.

    Food inflation increased to 3.7 per cent year on year in June, against growth of 2.8 per cent in May. This is above the 3-month average of 3.1 per cent.

    Fresh Food inflation increased to 3.2 per cent year on year in June, against growth of 2.4 per cent in May. This is above the 3-month average of 2.5 per cent.

    Ambient Food inflation increased to 4.3 per cent year on year in June, against growth of 3.3 per cent in May. This is above the 3-month average of 3.8 per cent.

    Helen Dickinson, Chief Executive of the BRC, said, “Within three months of the costs imposed by last Autumn’s Budget kicking in, headline shop prices have returned to inflation for the first time in close to a year.

    "Food inflation showed little sign of slowing down, particularly in fresh produce, where prices of meat have been impacted by high wholesale prices and more expensive labour costs.

    "Meanwhile, fruit and vegetable prices increased due to the hot, dry weather reducing harvest yields. Non-food goods remained in deflation as retailers cut prices across product categories, especially DIY and gardening so customers could make the most of the sunshine.

    “Retailers have warned of higher prices for consumers since last year’s Autumn Budget and the huge rises to Employer National Insurance costs and the National Living Wage.

    "We predicted a significant rise in food inflation by the end of this year, and this has been accelerated by geopolitical tensions and impacts of climate change.

    "To limit further rises, Government must find ways to alleviate the cost pressures bearing down on retailers. The upcoming business rates reform offers such an opportunity, and the Government must ensure no shop pays more as a result of the changes.”

    Mike Watkins, Head of Retailer and Business Insight, NielsenIQ, said, “Price increases are being driven by broader economic conditions and ongoing changes in the supply chain.

    "While the current spell of good weather is helping to boost demand at many retailers, rising prices could become a concern if consumer willingness to spend declines later in the year.

    "Which means we can expect retailers to reinforce their value-for-money messages over the summer.”