British households are facing renewed pressure on their grocery bills after the price of everyday staples such as eggs, butter and chocolate jumped sharply, driving food inflation to its highest level in 18 months.
The British Retail Consortium (BRC) said food prices rose by 4.2% in August compared with 4% in July, the steepest increase since February 2024. It comes as families already grappling with higher housing and energy costs prepare for another squeeze this autumn.
Helen Dickinson, the BRC’s chief executive, said the surge in food prices was piling further strain on household budgets. “Staples such as butter and eggs saw significant increases due to high demand, tightening supply and increased labour costs,” she said. “Chocolate also got more expensive as global cocoa prices remain high after poor harvests.”
Food Costs Outpace Wider Inflation
Overall shop price inflation edged up to 0.9% in August, the BRC said, even though non-food products became cheaper. Retailers argue they are doing what they can to absorb costs, but Dickinson pointed out that the industry is facing £7bn in additional expenses after changes to national insurance and the minimum wage introduced in last year’s autumn budget.
Supermarket bosses, including leaders at Tesco, Sainsbury’s and Boots, have warned the chancellor, Rachel Reeves, against raising taxes further in the coming budget, saying it risks undermining her pledge to improve living standards. Some in the industry now expect food inflation to climb as high as 6% by the end of the year.
Global and Seasonal Pressures
Mike Watkins, head of retail and business insight at NIQ, said several factors were behind the increase, from higher global supply costs to seasonal pressures linked to weather conditions. “As shoppers return from their summer holidays, many may need to reassess household budgets in response to rising household bills,” he said.
The latest BRC figures follow official data showing UK inflation ticked up in July to 3.8% — higher than expected and well above the Bank of England’s 2% target. The Office for National Statistics reported that food and non-alcoholic drinks were up 4.9% year on year, with beef, orange juice, coffee and chocolate among the biggest risers. Droughts in Spain, Italy and Portugal — key suppliers of fruit and vegetables to the UK — have also pushed prices higher at a time when they would normally ease.
Rising Energy Bills Add to the Strain
The squeeze on grocery budgets coincides with another looming rise in household energy bills. Ofgem, the energy regulator, is expected to lift its price cap by 1% in October, taking the average dual-fuel annual bill to about £1,737, according to forecasts by Cornwall Insight.
Charities warn millions of families cannot absorb further increases. Simon Francis of the End Fuel Poverty Coalition said: “We are now approaching the fifth winter of the energy bills crisis and the time for tinkering with the price cap is over.” The group estimates that 12.1 million households are already struggling to cover energy costs, with the average bill still 67% higher than in the winter of 2020–21.
Outlook
With both food and energy costs rising, campaigners warn that household finances will remain under intense strain heading into the winter. Retailers say they are working to keep prices down, but many admit the pressures of global supply chains, higher wages and climate shocks mean costs will stay volatile for months to come.
