Supermarket shoppers warned food prices 'not going anywhere but up'
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Supermarket shoppers have been warned food prices will rise by an average of 4.2% later this year. British Retail Consortium (BRC) chief executive Helen Dickinson said there was “little hope of prices going anywhere but up” as retailers look to mitigate higher employer National Insurance costs, as well as an increase in the minimum wage. Major retailers such as Tesco, Asda, Sainsbury’s and Marks and Spencer have all issued warnings of higher prices following the changes that were announced in the Budget.
Ms Dickinson said: “As retailers battle the £7 billion of increased costs in 2025 from the Budget, including higher employer NI, National Living Wage, and new packaging levies, there is little hope of prices going anywhere but up. Modelling by the BRC and retail chief financial officers suggest food prices will rise by an average of 4.2% in the latter half of the year, while non-food will return firmly to inflation.
“Government can still take steps to mitigate these price pressures, and it must ensure that its proposed reforms to business rates do not result in any stores paying more in rates than they do already.”. The latest BRC-NielsenIQ Shop Price Index shows shop prices were 1% lower in December than a year earlier. Prices of products other than food were 2.4% cheaper in December, the deepest deflation since April 2021, although this was influenced by later Black Friday discounting this year.
Food prices overall were unchanged at 1.8% higher than a year ago – the lowest since November 2021 – as was fresh food inflation at 1.2%, although ambient food inflation edged up to 2.8% from 2.7% in November. The BRC-NielsenIQ report follows figures from analysts Kantar this week showing inflation across supermarkets jumped from November’s 2.6% to 3.7% in December – its highest level since March.
