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Food prices have risen at their fastest rate in a year and a half, fuelled by sharp increases in chocolate, butter, and egg costs, according to the latest data.
The British Retail Consortium (BRC)-NIQ Shop Price Monitor shows food inflation reached 4.2% in August, up from 4% in July, the highest since February 2024. The trade body warned the rise was piling “extra pressure” on households already hit by the cost-of-living crisis.
Fresh food inflation climbed to 4.1%, driven largely by higher dairy prices, compared with 3.2% in July.
By contrast, ambient food inflation eased slightly to 4.2% year-on-year, down from 5.1% the previous month.
Overall shop price inflation also ticked up to 0.9% in August, despite a 0.8% fall in non-food prices.
The figures come shortly after the Bank of England linked April’s national insurance hike to the recent acceleration in food costs.
Helen Dickinson, chief executive of the BRC, said shop price inflation has reached its highest point since March last year, largely driven by food costs.
“This is putting added strain on families already struggling with the cost of living,” she noted. “Retailers are working hard to keep prices down, but, as the Bank of England has highlighted, the £7 billion in new costs stemming from last year’s budget have made that task extremely difficult.”
Last week, more than 60 retail leaders — including executives from Tesco, Sainsbury’s and Boots — warned Chancellor Rachel Reeves that any further tax hikes in the autumn budget could undermine her pledge to raise living standards.
In their letter, coordinated by the BRC, they cautioned that food and drink inflation could climb to 6% later this year.
Mike Watkins, NIQ’s head of retailer and business insight, said the recent rise in prices is linked to a mix of factors: higher global supply costs, seasonal food price pressures from weather conditions, the end of sports-related promotional offers, and increasing operational expenses.
He added that as households return from summer holidays, many will likely have to review their budgets to cope with rising bills.
