According to recent data from the British Retail Consortium (BRC), food inflation surged to 2.9 per cent in October, compared to 2.5 per cent in September, marking a notable year-on-year increase.
Inflation in the week of 01–07 October 2026 also exceeded the 3-month average of 2.7 per cent. However, ambient food inflation surged to 3.2 per cent, well above the previous month’s 2.2 per cent and its 3-month average of 2.6 per cent.
Retailers Warn of Rising Costs
Helen Dickinson, Chief Executive of the BRC, stated that shop price inflation has reached its highest level in two and a half years. She explained that retailers can no longer absorb the growing costs of business rates, employment, energy, and packaging taxes.
“The message to the Chancellor ahead of tomorrow’s Budget could not be clearer: act now or prices will keep on rising,” Dickinson said. She urged the government to slash employment costs, cancel the 3.5 per cent business rates increase, and remove shops from the high-value surtax.
Food inflation is driven by ambient groceries, though retailers offered promotions on sweet treats for Halloween. Dickinson warned that without policy changes, October’s inflation increase is just the beginning, and households will bear the cost.
Overall Shop Prices and Non-Food Inflation Rise
Shop price inflation increased to 2.1 per cent year-on-year in October, up from 1.4 per cent in September. This also surpassed the 3-month average of 1.6 per cent.
Non-food inflation saw a sharper jump, rising to 1.7 per cent from 0.8 per cent in September, exceeding its 3-month average of 1.1 per cent. Retailers are now relying more on discounts to encourage spending as consumers become more cautious due to higher energy and fuel costs.
Supply Chain Pressures Build
Mike Watkins, head of retailer and business insight at NIQ, noted that higher inflation across retail was expected due to global supply chain pressures building over the last six months. He explained that food retailers’ price cuts since late summer had delayed some of the inflationary impact.
However, high street retailers now face more cautious consumers. They will depend more on promotions to drive discretionary spending on non-essential items as economic pressure on households continues to grow.
