Food inflation rises again as steaks and fresh goods hit

UK shop prices remained stagnant in May, despite a fourth consecutive month of rising food inflation, new data reveals.

The British Retail Consortium (BRC)-NIQ Shop Price Index showed overall shop prices were 0.1 per cent cheaper than a year ago, mirroring April’s figures.

This overall deflation masks a significant rise in food prices, now 2.8 per cent higher than last year, accelerating from April’s 2.6 per cent increase. Wholesale meat price hikes are a key driver, impacting the cost of steak in particular.

Fresh food inflation is also climbing sharply, with prices 2.4 per cent higher than May 2023, a notable jump from April’s 1.8 per cent rise.

While food prices climbed, non-food items continued their deflationary trend, although at a slower pace. Prices were 1.5 per cent lower than a year ago, compared to a 1.4 per cent drop in April.

This slowdown is attributed to retailers scaling back promotional offers in categories like fashion and furniture. Conversely, electrical goods saw steeper price drops as retailers attempt to stimulate sales ahead of potential US tariff impacts. Gro

Ambient food inflation fell to 3.3 per cent from April’s 3.6 per cent.

BRC chief executive Helen Dickinson said: “While overall shop prices remain unchanged in May, food inflation rose for the fourth consecutive month.

“Fresh foods were the main driver, and red meat eaters may have noticed their steak got a little more expensive as wholesale beef prices increased.

“With retailers now absorbing the additional £5 billion in costs from April’s increased employer national insurance contributions and national living wage, it is no surprise that inflation is rearing its head once again.

“Later this year, retailers face another £2 billion in costs from the new packaging tax, and there are further employment costs on the horizon from the implementation of the Employment Rights Bill. Government must ensure the Employment Rights Bill is fit for purpose, supporting workers’ rights while protecting jobs and investment for growth.

“If statutory costs continue to rise for retailers, households will have to brace themselves for more difficult times ahead as prices rise faster.”

Mike Watkins, head of retailer and business insight at NielsenIQ, said: “Whilst shoppers are seeing savings at the checkout as retailers increase promotional activity, increasing prices is still an extra challenge to consumer spending alongside rising household bills.

“If consumer confidence remain weak as looks likely, then retailers may have to work harder to encourage shoppers to spend over the summer.”