Food costs ‘not going anywhere but up’, warns retail physique | EUROtoday

There is “little hope” of meals costs “going anywhere but up” within the second half of 2025 resulting from modifications introduced within the Budget, a retail foyer group has warned.

The prices of upper wages and National Insurance tax modifications coming in April might be handed on to shoppers, the British Retail Consortium (BRC) stated.

It forecast meals worth inflation would rise from 1.8% final month to 4.2% within the latter half of this yr, and that worth rises will proceed for vegetable oil, orange juice, butter, and occasional. It added that total store costs, which have been falling, will begin rising once more.

Chancellor Rachel Reeves has beforehand stated “the right thing to do was to ask businesses and the wealthiest in our country to pay a bit more”.

In her October Budget Reeves stated the National Living Wage for over 21s would enhance from £11.44 to £12.21 an hour from April and that employers’ National Insurance contributions would rise from 13.8% to fifteen%.

The BBC has requested the Treasury for remark.

Retailers hit again, warning in November that greater wages and taxes would make job cuts “inevitable”, and result in worth rises and store closures.

On Thursday, BRC chief government Helen Dickinson stated that modelling by the foyer group, mixed with predictions from 52 chief monetary officers, had led it to forecast a lot greater meals worth inflation within the latter half of the yr.

“As retailers battle the £7bn of increased costs in 2025 from the Budget, including higher employer National Insurance, National Living Wage, and new packaging levies, there is little hope of prices going anywhere but up,” she stated.

The foyer group stated meals worth inflation in December was working at 1.8%, which was its lowest fee since November 2021.

The BRC makes use of a unique basket of products to measure inflation in comparison with official figures from the Office for National Statistics, however they’re broadly comparable.

In the run-up to Christmas, costs went down in retailers total, however this was resulting from non-food items deflation, BRC stated.

The tempo of worth rises for contemporary meals akin to fruit and greens went up 1.2%, whereas inflation for retailer cabinet items was 2.8%.

Retailers have been warning about worth rises because of the Budget measures.

This week Next introduced that it’s going to increase costs on some clothes from April to offset “an unusually high” £73m enhance in employees wages and taxes.

Next stated it anticipated costs to extend by 1% over a yr, which is under the present fee of inflation. UK inflation hit 2.6% within the 12 months to Novemberthe very best degree for eight months.

Look at your cabinets so you understand what you’ve already

Head to the lowered part first to see if it has something you want

Buy issues near their greatest earlier than date which might be cheaper and use your freezer

Read extra ideas right here