The British Retail Consortium (BRC) has responded to newly released Consumer Price Index (CPI) data, which shows UK headline inflation rising to 3.5%, with food inflation climbing to 3.4% in April 2025. The uptick follows a wave of new operating costs for employers—particularly within the retail sector.
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Kris Hamer, Director of Insight at the BRC, explained the root causes behind the inflationary rise: 'Headline inflation accelerated in April as additional costs from rising National Living Wage and Employers' NI costs filtered through to prices faced by consumers, as well as rising costs of utilities (energy, water and broadband). The jump in labour costs pushed up food inflation, which climbed above 3%. However, there was some good news for furniture and clothing shoppers as prices fell year-on-year, with retailers offered good promotions on summer apparel and electricals. Even with food prices rising overall, there were still deals to be had, with prices of dairy products such as milk, cheese and eggs falling on the month.'
Retailers, who collectively employ over three million people across the country, have long cautioned that surging input costs would be passed on to consumers. The current figures appear to bear out those concerns. The BRC highlights that labour costs, driven by mandatory increases to the National Living Wage and Employers' National Insurance contributions, have combined with rising utility costs to exacerbate inflationary pressures.
While inflation has hit essentials like food, particularly fresh produce, Hamer noted that some consumer goods have offered relief. Year-on-year price drops in furniture, clothing, and electricals have softened the blow for households making non-essential purchases.
However, Hamer also issued a warning to policymakers:
'Rising inflation was inevitable following the wave of additional costs hitting employers, and particularly retailers who employ over 3 million people across the country. For months retailers have been warning that rising costs would lead to higher prices. To mitigate this, the government must now find ways to help reduce business costs and regulatory burden. It is imperative that its Employment Rights Bill targets unscrupulous employers and avoids burdening responsible businesses with additional costs which could put retail job numbers into reverse.'
The BRC calls on the government to strike a balance between safeguarding employee rights and protecting the viability of responsible employers. Without targeted relief, the retail sector, already navigating high fixed costs and fragile consumer confidence, could see employment numbers suffer.
As inflation edges upward again, the coming months may prove decisive for both the industry and policymakers seeking to stabilise prices and employment in tandem.
More information:
British Retail Consortium (BRC)
info@brc.org.uk
www.brc.org.uk