Households in the United Kingdom are facing steeper weekly shopping bills as food prices rise faster than overall inflation, driven by higher costs for essentials like beef and teabags.
According to the British Retail Consortium (BRC), food price inflation jumped to 4% in July, the highest level since February 2023. This outpaces the UK’s overall inflation rate, which rose to 3.6% in the year to June, up from 3.4% in May, according to the Office for National Statistics (ONS).
The ONS said that the inflation increase was largely fuelled by rising costs in food and fuel. Despite this, inflation remains well above the Bank of England’s 2% target.
BRC chief executive Helen Dickinson highlighted that staples such as meat and tea have been particularly affected due to tighter global supply chains. Retailers are also passing on rising labour costs following changes introduced in the Chancellor’s October Budget, which came into effect in April.
Call for govt intervention on inflation
Dickinson urged the government to consider the impact of further tax rises, warning that they would add to household costs. “Further tax rises will ultimately hurt households, locking in inflation and forcing people to pay higher prices to put food on the table,” she said.
July marked the sixth consecutive month of rising food inflation. As food is a major part of household spending, families are becoming increasingly sensitive to price changes.
Mike Watkins of data firm NielsenIQ noted that household budgets are under growing pressure as food prices continue to rise above the Consumer Prices Index.
However, he added that consumers could still save money through promotional offers and by shopping around.
“High street retailers will also be concerned about customer retention over the summer holidays if they are to maintain sales momentum,” Watkins said.
Overall shop price inflation rose to 0.7% in July, up from 0.4% in June. Non-food prices continued to fall, dropping by 1% in July thanks to summer sales in clothing and furniture, compared with a 1.2% decline in June.
Retailers are also bracing for additional cost pressures from a new packaging tax set to come into effect later this year. The levy, which charges companies based on the weight of packaging materials like glass, plastic, and aluminium, has raised concerns it could increase costs for businesses and lead to higher prices for consumers without significantly improving recycling rates.
