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Shop prices return to inflation for first time in almost a year

01 Jul 2025 2 minute read
A woman carrying shopping in plastic carrier bags.Photo Dominic Lipinski/PA Wire

Shop prices have returned to inflation for the first time in almost a year, figures show.

Overall shop prices were 0.4% higher in June than a year earlier – a significant jump from the decline of 0.1% seen in May, according to the BRC (British Retail Consortium)-NIQ Shop Price Index.

Food inflation increased to 3.7% from May’s 2.8% in May, while fresh food was 3.2% more expensive than a year ago.

Meat prices have been hit by high wholesale prices and more expensive labour costs, and fruit and vegetable prices increased due to the hot, dry weather reducing harvest yields.

Budget

Non-food goods remained in deflation at 1.2% cheaper than last June – but up from May’s decline of 1.5% – as retailers cut prices, especially on DIY and gardening items.

BRC chief executive Helen Dickinson said: “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.

“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.”

Changes

Mike Watkins, head of retailer and business insight at NielsenIQ, said: “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.”


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