Britain’s largest retailers struggled to entice shoppers back to the high street in July as the rising cost of meat and butter drove up food prices, adding to pressure on household finances. According to the latest snapshot from the British Retail Consortium (BRC), food prices rose by 4% in July from a year earlier, up from 3.7% in June and above the three-month average of 3.5%.
Highlighting the pressure on household budgets, the BRC said while fresh vegetables and fruit inflation held steady at 3.2%, cupboard food prices jumped by 5.1% compared with a year earlier, up from 4.3% in the year to June. Official figures earlier this month showed meat prices jumped by 17% in the year to June, while butter, which was falling in price between 2023 and 2024, increased by 18.2% over the past year.
A separate survey by the Confederation of British Industry (CBI) on Monday found retailers struggled through the summer months, blaming uncertainty about the economic outlook for persuading customers to keep their wallets shut. The balance of shops reporting a decline in sales slowed from -46% in June to -34% in July, on a scale where the percentage of retailers reporting negative sales is subtracted from those reporting an increase. Retailers expect sales to fall at a broadly similar pace next month.
Martin Sartorius, a principal economist at the CBI, said companies reported that higher price pressures – driven by rising labour costs – and economic uncertainty “continued to weigh on household demand and contributed to sales volumes falling since October 2024”. The twin trends of economic uncertainty and higher prices were encouraging households to save rather than spend, intensifying an already difficult period for high street and online retailers, he added.
Helen Dickinson, chief executive of the BRC, said the rising price of some staple foodstuffs, including meat and tea, had pushed up overall food price inflation for a sixth consecutive month. Both were affected by tighter global supplies, contributing to higher shop price inflation overall. Total shop price inflation, including non-food items, rose to 0.7% in July year on year, up from 0.4% in June. Dickinson noted a few bright spots, with discounts in fashion and furniture “offering consumers a chance to refresh their wardrobe and homes”.
