Bulletin: Food inflation to reach 5.1% in 2025

UK food inflation to peak at 5.1% in 2025

Retail food inflation is set to outpace general inflation and hit a 5.1% peak this summer, piling pressure on household budgets and reshaping shopper behaviour. 

Key points from new IGD research reveals:

• 83% of shoppers expect retail food prices to keep rising

• Food inflation is projected to average 4.0% in 2025, up from 3.4% previously forecast

• Food inflation is expected to decline to 1.6%–2.6% in 2026 and 1.8% in H1 2027

• IGD Shopper Confidence Index dipped to +1 in June, with three-quarters of consumers bracing for tax hikes

See our latest FREE report, UK Food Inflation Forecasts 2025–2027. 

IGD opinion 

Food inflation at these levels will erode disposable incomes and force consumers to prioritise essentials. Lower-income households will feel the squeeze most, while higher earners and Gen Z continue to spend on premium and novel experiences. Retailers and manufacturers must sharpen their focus on value, convenience and engaging experiences to capture shifting consumer demand. 

Solving the food industry skills gap

The UK food and grocery sector faces a growing shortage of engineering, digital and technical talent. As the need for skilled workers rises, IGD’s Mmmake Your Mark campaign returns on 27 August for a ‘thunderclap day’ and continues throughout September to spotlight careers and inspire the next generation.

• Industry-wide LinkedIn push to attract agile talent

• Free campaign toolkit with branded assets, video and social guides

• 2024 campaign reached 7 million users

• Join in: post with #mmmakeyourmark or tag @mmmakeyourmark on LinkedIn

See our latest article, Mmmake Your Mark: Solve skills gap and inspire

IGD opinion

Bringing the sector together for a ‘thunderclap day’ and a campaign throughout September not only attracts new talent but energises existing teams. Use this moment to showcase your brand, reignite workforce pride and shape the next generation of food innovators. 

Nature first: bill boosts green protections

The government’s amendments to the Planning and Infrastructure Bill strengthen environmental protections by making it mandatory for development plans to deliver a net gain for nature.

The new Nature Restoration Fund will require robust scientific evidence, enforce back-up conservation measures, and trigger remedial action if outcomes fall short. Natural England must now prioritise local conservation unless wider benefits are proven, ensuring development supports genuine nature recovery.

See our article, Nature of UK food: A view from Groundswell fields

Farm closures

The ONS has reported that 6,365 agriculture, forestry and fishing businesses have closed over the past year. This represents a 14% increase on the year before. There has been a slight decline in the number of businesses starting up (3,190 vs 3,265 for the previous year.)

Retail crime

The ONS has reported that shoplifting offences increased by 20% in the year to March 2025. This is the highest level since records began in 2003. The Association of Convenience Stores has reported 6.2m incidents of theft last year, costing the sector £316m.

GCA annual conference confirmed

The Groceries Code Adjudicator (GCA) will host its 2025 Annual Conference on 30 September, bringing together retailers, suppliers, and industry experts. The event will focus on sector priorities, supplier support, and Code compliance progress. Sign-up is open now via the GCA website.