Food inflation is set to soar next year, as extreme weather, rising input costs and supply chain disruption puts renewed pressure on grocery prices, according to the Institute of Grocery Distribution (IGD).
The research charity forecasts average food inflation of 2.9 per cent to 3.9 per cent for 2026, before sharply increasing to 5.6 per cent to 6.6 per cent in 2027 and remaining elevated at 5.3 per cent to 6.3 per cent in 2028.
IGD said food stocks, hedging and moderate consumer demand have helped retailers absorb higher costs and protect shoppers from price rises this year.
However, those buffers are expected to weaken as disruption in the Middle East, rising input costs and extreme weather feed through supply chains.
Among the other geopolitical challenges, El Niño is identified as one of the biggest risks, with the weather phenomenon already affecting major food-producing regions. IGD expects its impact on crop yields, quality and availability to persist well into 2027 and beyond.
Fruit and vegetables are forecast to make the biggest contribution to higher food inflation because of their shorter production cycles and sensitivity to weather.
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Other food and non-alcoholic drink categories are also expected to face pressure from energy costs, regulation and supply chain disruption.
“Food inflation’s current weakness will not last,” said IGD chief economist James Walton. ”Stock buffers and hedging have delayed, not removed, the pressure building from disrupted energy markets and extreme weather.
“Shoppers have already adapted to repeated periods of high food price inflation. Many have changed how and where they shop, switched products or reduced discretionary spend, leaving fewer options available to absorb any further price rises.
“For businesses, this reinforces the need to look beyond short-term mitigation and focus on strengthening the resilience of the food system.
Walton said: “Greater productive capacity, ideally domestically where appropriate, would help improve resilience across the food system.
“Combined with stronger productivity, this could support the industry’s contribution to UK economic growth and help drive more stable pricing over time.”
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