UK shoppers are bracing for another hit to their wallets as food prices are predicted to surge by nearly 5% in 2025.

According to the Institute of Grocery Distribution (IGD) ‘Hungry For Growth’ report, food prices could rise by 4.9% next year, which would mean that grocery bills had skyrocketed by 40% since 2020, the Evening Standard reported.

The predicted hike in food prices is primarily down to high labour costs, including the increase in the National Living Wage and higher National Insurance bills, as well as the implementation of the Windsor Framework, which could lead to higher food import costs from July 2025. 

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The food production sector is estimated to absorb just 20% to 40% of these costs, with the remainder passed on to consumers.

The report also highlighted food inflation as one of the biggest challenges for UK households in 2025.

IGD chief economist James Walton said: “The rising cost of living, combined with increased employment and regulatory costs, will keep inflation elevated. Consumers will undoubtedly look for ways to save money, but the impact of these cost pressures will be felt across the economy.”

According to the latest British Retail Consortium (BRC)-NielsenIQ Shop Price Index, food inflation slowed to its lowest rate since November 2021 to 1.8% in November, down from 1.9% the month before, despite prices of seafood, tea and coffee remaining high.