Britain’s major retailers faced a challenging July as persistent inflation, particularly in essential groceries such as meat and butter, continued to squeeze household budgets and dampen consumer confidence.
The latest data from the British Retail Consortium (BRC) revealed that food prices rose by 4% year-on-year in July, up from 3.7% in June and surpassing the three-month average of 3.5%. The figures highlight ongoing cost-of-living pressures facing UK households.
While inflation on fresh produce like fruit and vegetables remained stable at 3.2%, the cost of store-cupboard staples surged by 5.1% in July compared to the previous year—an increase from June’s 4.3%. Meat prices alone soared by 17% in the year to June, while butter, which had seen falling prices in 2023 and early 2024, spiked by 18.2%.
A separate report by the Confederation of British Industry (CBI) further underscored the retail downturn, indicating that stores struggled throughout the summer amid rising costs and widespread economic uncertainty. According to the CBI’s latest survey, the net balance of retailers reporting falling sales improved slightly to -34% in July from -46% in June, but the outlook remains subdued, with similar trends expected next month.
Martin Sartorius, Principal Economist at the CBI, noted that rising labour costs and economic uncertainty continue to dampen consumer spending and have led to declining sales volumes since October 2024. With households choosing to save rather than spend, high street and online retailers alike are facing a difficult trading environment.
Helen Dickinson, Chief Executive of the BRC, warned that the rising prices of everyday essentials such as meat and tea—driven by tight global supply chains—have fuelled shop price inflation for the sixth consecutive month. Overall shop price inflation, including non-food goods, rose to 0.7% in July, up from 0.4% in June.
Despite the challenges, there were a few bright spots in early July. Retailers offered promotions in fashion and homeware, giving consumers opportunities to update their wardrobes and interiors at lower prices.
Meanwhile, data from the Office for National Statistics (ONS) showed a more optimistic picture, reporting a 0.9% rise in retail sales across Great Britain in June. This uplift was partly attributed to warm summer weather and popular events such as Wimbledon, concerts by Beyoncé and Oasis, and major football and cricket tournaments.
