Year of increases for UK retailers, food inflation to hit 4,2%

Two-thirds of UK retailers will increase prices in 2025, according to a British Retail Consortium (BRC) survey of CFOs (Chief Financial Officers) of 52 major retailers, which found they were significantly concerned about trading conditions over the next 12 months. Seventy percent of respondents said they were pessimistic, while just 70% were optimistic.

The main concerns are falling demand, inflation and increased tax and regulatory burdens. Due to the increase in National Employer Contributions (NIC) from April 2025, 67% of CFOs plan to increase prices, while many will reduce hours, overtime and staffing, or invest in automation. 46% will reduce capital expenditure and 25% will delay new store openings. Additionally, 44% expect a reduction in profits, which will limit their operations.

Helen Dickinson, CEO of the BRC, said retailers will face tough decisions on pricing, investment and employment. Food inflation is forecast to hit 4,2% in the second half of 2025, with overall store inflation at 2,2%. The challenges are being amplified by low consumer confidence and weak demand.

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