UK shop price inflation rose to 0.4% year-on-year in June 2025, driven by increased costs from government policies and climate impacts, according to data from the British Retail Consortium (BRC)-NielsenIQ.
The return to inflation marks a shift from the previous month’s decline of -0.1%. This increase surpasses the three-month average of 0.1%, indicating a trend towards higher retail prices.
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Non-food items saw a lesser deflation rate of -1.2% compared to -1.5% in May, while food inflation soared to 3.7%, up from 2.8% in May.
The fresh food sector experienced a significant inflation increase to 3.2% year-on-year in June, up from 2.4% in May, exceeding the three-month average of 2.5%.
Ambient food inflation grew to 4.3%, a notable jump from 3.3% in the preceding month and higher than the three-month average of 3.8%.
BRC chief executive Helen Dickinson stated: “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.”
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By GlobalDataDickinson highlighted the impact of high wholesale prices and labour costs on meat prices, as well as weather-related decreases in fruit and vegetable yields.
Despite deflation in non-food goods, Dickinson warned of higher consumer prices due to increased Employer National Insurance and the National Living Wage, urging government action to mitigate cost pressures on retailers.
NielsenIQ Retailer and Business Insight head Mike Watkins stated: “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.”
UK retail sector growth faced a slowdown in May 2025 as consumer spending decelerated, according to data from the BRC-KPMG Retail Sales Monitor.
