UK retailers have warned that the ongoing Iran conflict is set to drive up supermarket prices, urging the government to ease domestic cost pressures. The British Retail Consortium (BRC) said businesses are already absorbing higher energy and shipping bills, which will soon filter through to shoppers.
The BRC, representing over 200 major retailers, called for government action to reduce National Insurance, packaging levies, new regulations, and business energy charges. It noted that businesses have been hit by £6.5 billion in extra costs. A survey for the BRC found 73% of people expect the Middle East conflict to raise prices on non-food items, while 81% worry about energy bills, 76% about fuel, and 68% about tax increases.
Separately, the Food and Drink Federation (FDF) warned food inflation could reach 9% by the end of 2026, with the Bank of England told it could hit 7%. BRC chief executive Helen Dickinson said: “The Middle East conflict is driving up costs across the supply chain and families are right to be concerned. But not every pressure bearing down on retailers comes from the Gulf.” She urged the government to act, noting other countries like Germany are reducing electricity costs for businesses.
Chancellor Rachel Reeves recently met with major supermarkets to discuss the conflict’s impact. Last week, she announced plans to suspend tariffs on selected food and drink to help consumers. A government spokesperson said: “We are acting to protect people from any potential increases in food prices. We have already suspended select food tariffs and continue to work closely with the sector.”
