Food prices ‘not going anywhere but up’, warns retail body

There’s “little hope” of meals costs “going anyplace however up” within the second half of 2025 as a consequence of modifications introduced within the Price range, a retail foyer group has warned.

The prices of upper wages and Nationwide Insurance coverage tax modifications coming in April shall be handed on to customers, the British Retail Consortium (BRC) stated.

It forecast meals value inflation would rise from 1.8% final month to 4.2% within the latter half of this 12 months, and that value rises will proceed for vegetable oil, orange juice, butter, and low. It added that general store costs, which have been falling, will begin rising once more.

Chancellor Rachel Reeves has beforehand stated “the precise factor to do was to ask companies and the wealthiest in our nation to pay a bit extra”.

In her October Price range Reeves stated the Nationwide Residing Wage for over 21s would enhance from £11.44 to £12.21 an hour from April and that employers’ Nationwide Insurance coverage contributions would rise from 13.8% to fifteen%.

Retailers hit again, warning in November that increased wages and taxes would make job cuts “inevitable”, and lead to price rises and store closures.

On Thursday, BRC chief government Helen Dickinson stated that modelling by the foyer group, mixed with predictions from 52 chief monetary officers, had led it to forecast a lot increased meals value inflation within the latter half of the 12 months.

“As retailers battle the £7bn of elevated prices in 2025 from the Price range, together with increased employer Nationwide Insurance coverage, Nationwide Residing Wage, and new packaging levies, there’s little hope of costs going anyplace however up,” she stated.

The foyer group stated meals value inflation in December was working at 1.8%, which was its lowest fee since November 2021.

The BRC makes use of a special basket of products to measure inflation in comparison with official figures from the Workplace for Nationwide Statistics, however they’re broadly related.

Within the run-up to Christmas, costs went down in outlets general, however this was as a consequence of non-food items deflation, BRC stated.

The tempo of value rises for contemporary meals corresponding to fruit and greens went up 1.2%, whereas inflation for retailer cabinet items was 2.8%.

Retailers have been warning about value rises as a result of Price range measures.

This week Subsequent announced that it will raise prices on some clothes from April to offset “an unusually excessive” £73m enhance in workers wages and taxes.

Subsequent stated it anticipated costs to extend by 1% over a 12 months, which is beneath the present fee of inflation. UK inflation hit 2.6% in the 12 months to November, the very best degree for eight months.

Take a look at your cabinets so what you’ve gotten already

Head to the diminished part first to see if it has something you want

Purchase issues near their finest earlier than date which shall be cheaper and use your freezer

Learn extra ideas right here