Retail leaders have described a meeting with Chancellor Rachel Reeves on the cost of living as constructive, as concerns mount over the impact of Middle East conflict on inflation and supply chains.
Reeves and energy secretary Ed Miliband met supermarket bosses from Tesco, Sainsbury’s and Aldi on Wednesday to discuss the pressures facing consumers and the wider grocery sector.
A government spokesperson said those involved had agreed to work together to explore what more could be done to ease the cost of living and strengthen supply chains.
British Retail Consortium chief executive Helen Dickinson said the talks had been constructive, adding that while “some inflation is inevitable”, there were still “domestic policy levers that government can pull in order to mitigate some of the inflationary pressures”.
The meeting comes as the Food and Drink Federation (FDF) has revised its food inflation forecast sharply upwards and now expects it to rise to more than 9 per cent by the end of the year.
The trade body said its updated forecast assumes the Straits of Hormuz reopens within two to three weeks and energy production in the Middle East returns to normal within a year.
That marks a significant deterioration from its previous outlook, which had suggested food inflation would gradually ease through 2026 and end the year at around 3 per cent.
The latest talks follow an emergency meeting held last week between ministers and some of the UK’s biggest supermarket groups, amid warnings that food inflation could hit double digits this year.
That earlier session was attended by executives from Tesco, Sainsbury’s, Morrisons, Aldi, Lidl, Co-op, Marks & Spencer, Iceland and Ocado, alongside the BRC. Asda did not attend.
Retailers are understood to have raised a range of concerns with government, including the cumulative impact of policy and regulatory costs on the sector.
Among the issues discussed were workers’ rights reforms, recent increases to employers’ national insurance contributions, changes to the minimum wage and the controversial Extended Producer Responsibility tax, which requires large businesses to contribute to the cost of disposing of packaging.
The mounting pressure on food prices is likely to intensify scrutiny on the government’s approach to retail costs, with grocers warning that external shocks are colliding with domestic policy burdens at a time when household budgets remain under strain.
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