Shop price inflation in the UK slowed in February as intense competition among retailers helped keep price rises down, according to the latest data from the British Retail Consortium (BRC) and market research partner NIQ.

Annual shop price inflation eased to 1.1% in February, down from 1.5% in January, reflecting competitive pricing strategies across the sector.

Shop price inflation trends

The BRC-NIQ Shop Price Monitor shows that food and non-food price trends diverged in February. Overall shop price inflation was 1.1% year-on-year, in line with its three-month average.

Food inflation grew by 3.5% compared with February 2025, while non-food prices fell 0.1% over the same period.

Retailers’ pricing decisions appear to have contributed to the broader easing in inflationary pressures. BRC chief executive Helen Dickinson said, “Fierce competition between retailers kept price rises in check, with promotions across health, beauty and fashion.”

She also noted that “falling global food costs…pushed food inflation down, with ambient food inflation dropping to its lowest level in four years.”

Competitive pricing and consumer impact

Industry data suggests that heightened competition has led to more aggressive discounting in both food and non-food categories.

Mike Watkins, head of retailer and business insight at NIQ, said: “Since the start of the year, we have seen some competitive pricing across both the food and non-food channels, which is helping to bring down inflation.”

For international businesses monitoring UK retail trends, the moderation in shop price inflation offers insights into how market forces can influence consumer prices even amid broader economic pressures.

The shift to price promotions and competitive offers across sectors such as health, beauty and fashion signals retailers’ efforts to attract cautious shoppers.

Sector outlook and price pressures

Despite the easing in shop price inflation, inflation remains above the Bank of England’s target for consumer prices, leaving households and businesses under continued pressure. Dickinson cautioned that “prices are still rising, and many consumers remain under pressure.”

Retail operates on narrow margins, and the report highlights ongoing concerns about rising business costs.

Dickinson warned that new legislation, including changes under the Employment Rights Act, could add complexity and potentially increase costs for retailers unless implemented with an eye on business impact.

The February price trends underscore the role of competition in containing price increases and provide a current snapshot of consumer price dynamics in the UK retail sector.

Retailers and industry observers will be watching how these trends evolve as cost pressures and market conditions continue to shift.