Food price inflation surged to 3.7% in June, the sharpest rise in more than a year, as British retailers warned of the combined impact of climate pressures and rising operational costs.
Figures from the British Retail Consortium (BRC) and NielsenIQ show food costs jumped from 2.8% in May, helping to push overall shop price inflation back into positive territory for the first time since July 2024. Total shop prices rose 0.4% year-on-year, up from a 0.1% fall last month.
The BRC said higher prices were largely driven by the soaring cost of fruit and vegetables as this year’s hot, dry weather dented harvest yields. Wholesale prices for gooseberries were up 243% annually, while blackberries rose 25% and apples 7%, according to government data.
Meat prices were also under pressure from rising wholesale and labour costs.
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BRC chief executive Helen Dickinson said: “Retailers have warned of higher prices for consumers since last year’s autumn budget and the huge rises to employer national insurance costs and the national living wage.
“We predicted a significant rise in food inflation by the end of this year, and this has been accelerated by geopolitical tensions and impacts of climate change.”
Non-food prices continued to fall in June, though the decline eased slightly to 1.2% compared with a 1.5% drop in May. Retailers have been discounting DIY and garden goods to make the most of warmer weather and boost footfall.
NielsenIQ’s head of retailer insight, Mike Watkins, said the sunny spell has helped drive demand but warned that rising prices could dampen spending later in the year. “We can expect retailers to reinforce their value-for-money messaging over the summer,” he added.
Following Rachel Reeves’s autumn budget, retailers warned that the chancellor’s £25bn increase in employer national insurance contributions and 6.7% national living wage rise, introduced from April, would force them to raise their prices.
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