Soaring food costs have pushed shop price inflation higher in the UK, particularly during the crucial Christmas season. According to fresh data from the British Retail Consortium (BRC) and NIQ, food inflation reached 3.3 percent in December 2025, up from 3.0 percent in November. This increase in food prices is contributing to a broader inflation rate of 0.7 percent across all shop prices.
The rise in food costs is particularly notable for fresh produce, which saw inflation climb to 3.8 percent from 3.6 percent in the previous month. Despite this, the December figure remains just below the nine-month average of 3.9 percent. Helen Dickinson, chief executive of the BRC, commented on the ongoing challenges faced by retailers, stating, “This year, retailers will continue to do all they can to keep prices down. While falling energy prices and improved crop supply should help ease some cost pressures, increased public policy costs and regulation will likely keep inflation sticky.”
Public concern about food prices is substantial. A recent survey conducted by KPMG found that 81 percent of respondents who believed the UK was deteriorating cited the cost of groceries as their primary concern. In response to the challenging economic landscape, leading supermarkets in the UK, including Tesco, Lidl, and Morrisons, have written to Chancellor Rachel Reeves, urging the Treasury to take action to address inflation.
Despite some relief during the festive season, where deflation on non-food products steadied at 0.6 percent, the overall inflation rate remains significantly above the Bank of England’s target of 2 percent. The Office for National Statistics noted that food prices are the major contributing factor to this persistent inflation. Even with some decreases in specific categories, such as cakes, biscuits, and breakfast cereals, significant price hikes have been recorded. For instance, beef prices surged by a staggering 27.7 percent year-on-year, while chocolate and milk prices increased by 17.3 percent and 14.8 percent, respectively.
Looking ahead, Mike Watkins, head of retailer and business insight at NIQ, indicated that “weak shopper sentiment” is likely to continue into 2026, even as inflation is expected to have peaked. The ongoing pressure from rising food costs is expected to impact consumer behaviour, further complicating the situation for retailers and policymakers alike.
As the UK traverses these economic challenges, the effects on consumer spending and overall economic stability remain to be seen. The call for action from the retail sector underscores the urgency of addressing inflation and its impacts on everyday life for consumers.
