Shoppers at major UK supermarkets including Tesco, Sainsbury’s, Asda, and Lidl are being cautioned about a significant rise in grocery costs that experts have said is unavoidable. According to new analysis from retail leaders and market experts, food prices are on track to rise steeply by the end of the year, placing growing financial pressure on households across the country. The British Retail Consortium (BRC) has estimated that the average shopper could see nearly £300 added to their yearly food bill, affecting customers at not only the “big four” supermarkets but also Aldi, Iceland, Morrisons, and others.
A new survey released yesterday, Thursday July 31, also highlighted deepening anxiety within the retail sector. Faced with the possibility of further tax hikes, 56% of chief financial officers (CFOs) in the industry described their outlook for the next year as pessimistic. Many report having to halt hiring or reduce in-store staff as part of cost-cutting efforts.
Food inflation has already climbed to 4%, and the BRC predicts it could reach 6% by the end of 2025, putting households under even greater pressure as they try to manage their weekly shopping budgets.
The rising cost is largely due to increases in National Insurance, the National Living Wage, and other taxes introduced in the last Budget, it said.
The survey showed that 85% of retailers had no choice but to pass on these costs through price hikes.
The financial strain is also affecting jobs, the new research found, with 42% of retailers freezing recruitment and 38% reducing staff numbers in stores.
Official figures found that there were nearly 100,000 fewer retail jobs in the first quarter of 2025 compared to the same period last year.
Helen Dickinson, the chief executive of the British Retail Consortium, said: “Retail was squarely in the firing line of the last budget, with the industry hit by £7 billion in new costs and taxes.
“Retailers have done everything they can to shield their customers from higher costs, but given their slim margins and the rising cost of employing staff, price rises were inevitable.
“The consequences are now being felt by households as many struggle to cope with the rising cost of their weekly shop.
“It is up to the Chancellor to decide whether to fan the flames of inflation, or to support the everyday economy by backing the high street and the local jobs they provide.”