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Britain’s largest retailers struggled to entice shoppers back to the high street in July as the rising cost of meat and butter drove up food prices, adding to the pressure on household finances.
According to the latest snapshot from the British Retail Consortium (BRC) food prices rose by 4% in July from a year earlier, up from 3.7% in June and above the three-month average of 3.5%.
Highlighting the pressure on household budgets from the rising cost of groceries, the BRC said while fresh vegetables and fruit inflation held steady at 3.2%, cupboard food prices jumped by 5.1% compared with a year earlier, up from 4.3% in the year to June.
Official figures earlier this month had shown that meat prices jumped by 17% in the year to June. Butter, which was falling in price between 2023 and 2024, had increased by 18.2% over the past year.
A separate survey by the Confederation of British Industry (CBI) business lobby group on Monday also found that retailers had struggled through the summer months, blaming uncertainty about the economic outlook for persuading customers to keep their wallets and purses shut.
Rising prices also made July a difficult month for retailers, although the situation had improved slightly from June, the CBI said.
The balance of shops reporting a decline in sales slowed from -46% in June to -34% in July, on a scale where the percentage of retailers in the survey reporting negative sales is subtracted from the share reporting an increase. Retailers expect sales to fall at a broadly similar pace next month.
Martin Sartorius, a principal economist at the CBI, said companies reported that higher price pressures – driven by rising labour costs – and economic uncertainty “continued to weigh on household demand and [have] contributed to sales volumes falling since October 2024”.
The twin trends of economic uncertainty and higher prices were encouraging households to save rather than spend, intensifying an already difficult period for high street and online retailers, he added.
Helen Dickinson, the chief executive of the BRC, said the rising price of some staple foodstuffs, including meat and tea, had pushed up overall food price inflation for a sixth consecutive month. Both were affected by tighter global supplies, contributing to higher shop price inflation overall.
Total shop price inflation, including non-food items, rose to 0.7% in July year on year, up from a growth rate of 0.4% in June.
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Dickinson said there were a few bright spots in the survey conducted in the first week of July, with discounts in fashion and furniture “offering consumers a chance to refresh their wardrobe and homes”.
Last week the Office for National Statistics said retailers were benefiting from the sunny summer weather and events including Wimbledon, concerts by Oasis and Beyoncé, and international football and cricket.
The official figures showed retail sales in Great Britain rose by 0.9% in June, in contrast to the more downbeat industry surveys.
