UK Retail Price Growth Hits Seven-Month Low as Summer Promotions Weigh on Food and Beverage Prices

VG Markets · 2026-07-28T02:47:12Z
UK Retail Price Growth Hits Seven-Month Low as Summer Promotions Weigh on Food and Beverage Prices

UK retail price inflation slowed to 0.9% year-on-year in July, the smallest increase since December 2025, according to the latest British Retail Consortium (BRC) and NIQ shop price index. Prices also edged down 0.1% month-on-month, reflecting widespread summer discounting across supermarkets and retailers. The survey was based on retail prices collected between July 1 and July 9.

Category Breakdown

  1. Food inflation eased to 2.2% from 2.4% in June, marking the slowest pace since February 2025.
  2. Fresh food inflation, however, accelerated to 3.1% from 2.8%, indicating that price pressures in fresh produce remained relatively elevated.
  3. Non-food inflation slowed sharply to 0.2% from 0.6%, although some categories, including electronics and health & beauty products, continued to record price increases.

BRC Chief Executive Helen Dickinson said retailers intensified price competition during July to help ease cost pressures for consumers, with supermarkets launching broad summer promotions on food and other household goods, while some clothing and footwear retailers also expanded seasonal clearance discounts.

Comparison with Official Inflation Data

The BRC Shop Price Index differs in coverage from the broader Consumer Prices Index (CPI) published by the UK's Office for National Statistics (ONS). Official CPI inflation slowed to 2.6% in June, its lowest level in 15 months.

However, the Bank of England has previously indicated that higher energy prices could push CPI back above 3.25% later this year, presenting a different picture from the recent moderation seen in retail prices.

Market Focus

July's softer retail price data may partly reflect seasonal promotional activity, and it remains too early to determine whether it signals a sustained easing in inflation. Market participants will closely monitor the UK's August CPI release and retail sales data for additional insight into inflation trends and the potential implications for the Bank of England's policy outlook.