Food inflation in the UK accelerated for the fourth month in a row in May, with prices now 2.8% higher than the same period last year, up from 2.6% in April. The increase, driven mainly by rising wholesale meat costs, comes despite overall shop price deflation holding steady at 0.1% year-on-year, according to the latest British Retail Consortium (BRC)-NIQ Shop Price Index.
Fresh food prices increased sharply, climbing to 2.4% from April’s 1.8%. In contrast, ambient food inflation eased slightly to 3.3%, down from 3.6% the previous month.
Retailers in non-food categories continue to face deflation, particularly in electricals, where prices dropped as businesses moved early to stimulate demand ahead of potential US trade impacts. However, deflation in fashion and furniture has slowed as discounting activity tapered off.
The report comes amid mounting cost pressures on retailers, who are absorbing additional expenses from national insurance and minimum wage increases. Further statutory costs, including a new packaging levy and requirements from the Employment Rights Bill, are expected later in the year.